Epax ESG report

Energy consumption

2022 was a milestone for Epax in terms of energy consumption. It was the first year we used more renewable energy (electricity generated by clean hydropower) than fossil fuel energy.

Our use of fuel oil decreased by nearly two-thirds between 2019 and 2022, partly due to the installation of a new electric boiler to produce steam.

We ensure new equipment installed is efficient in terms of power consumption, including upgrading end-of-life components and plant with energy-saving alternatives. We also use residual heat from production to heat our offices.

To reduce the energy needed to produce marine ingredients, we process only fish species with a naturally high concentration of polyunsaturated fatty acids (PUFAs).

Future goals

• In 2023, we aim to meet more than 85% of our energy needs with renewable energy.
• By 2025, our goals are to ensure that 100% of the energy used in our factory is renewable, and that we achieve a higher yield with lower energy consumption

Emissions

Carbon footprint

As is typical in our industry, most of our CO₂ emissions come from our raw materials. However, by reducing fossil fuel use in our factory, between 2021 and 2022 we cut our CO₂ emissions by 13.3% – around 1,300 MT. In 2022, we switched a large proportion of our by-product transport from road to boat. This contributed to a 30% reduction in heavy transport through the local environment and a 90,000km reduction in overall truck transport.

Future goals

• We will achieve an absolute reduction in CO₂ emissions each year until 2030.

Sea and air emissions

SDG 14 – life below water – is fundamental to Epax, given that we are wholly dependent on a healthy and viable ocean for our products. We are already compliant with target 14.1 – to reduce marine pollution.

Responsibility for monitoring emissions is hardwired into Epax’s procedures. Our ISO 14001 certification evidences the strength of our internal monitoring systems, including our environmental policy (page 10).

Sea emissions are strictly regulated by the Norwegian Environment Agency, from which all Norwegian companies require an emissions permit. The agency gives a limit value based on type of industry and production volumes. Our own in-house system constantly monitors samples by a given volume flow, analysing emissions of fat, BOD, heavy metals, and pH. These are reported internally every month and annually to the Norwegian Environment Agency. Emissions from chimney to air are measured once a year by Epax’s technical department, following the same rules as for sea emissions.

Future goals

• By 2030, we will reduce biological oxygen demand (BOD) and chemical oxygen demand (COD) by 60%.

Water consumption & sea-water cooling

Production of Omega-3 concentrates requires cycles of heating and rapid cooling. In 2022, we invested in equipment that enabled us to switch from cooling with potable water to seawater. The self-contained system pumps in crystal-clear seawater from the fjord next to our factory, uses it for cooling, and then returns it to the fjord in its original pristine condition. The temperature of fjord water is stable and cold all year round, making it ideal for this purpose.

The new system has reduced the consumption of potable water in our factory by 57% and aligns us with SDG target 6.4, to increase water-use efficiency and ensure potable water supplies.

Future goals

• By 2025, we will use 80% less potable water for cooling in our factory than in 2021.

Circular economy

In 2022 we achieved 96.7% circularity for our biomaterials, compared to a global circularity average of just 7.2%.

The circular economy – also known as circularity – aims to create a better balance between economy, environment and society by promoting the adoption of closing-the-loop production.³  This focuses on minimising the use of raw materials, maximising product reuse or recycling, and making new products from waste and by-products.⁴ 
The concept was developed as an alternative to the “take, make and dispose” model of continuous economic growth and increasing resource use.

At Epax, we operate a strictly zero-waste policy, sharing the commitment of our parent company Pelagia AS to 100% fish utilisation. Any by-products generated from the production of our main Omega-3 products are refined into other valuable resources.  

³ Ghisellini, Cailani, Ulgaiati, A review on circular economy: the expected transition to a balanced interplay of environmental and economic systems. Journal of Cleaner Production, 2016, 114: 11-32, https://doi.org/10.1016/j.jclepro.2015.09.007
⁴ United Nations Conference on Trade and Development, https://unctad.org/topic/trade-and-environment/circular-economy

Pure processes

We have been a leader in fish oil purification since 1986, when we installed a two-stage distillation unit. We consolidated our position in early 2023 with a major facilities upgrade and the launch of proprietary, next-level molecular distillation EQP+Tech processing technology. This allows individual fatty acids to be separated from fish oil and ultra-concentrated without the use of excessive heat or harsh chemicals (such as hexane, acetone, methanol, or petroleum ether). This is the most environmentally friendly way to produce highly concentrated products that fully utilise the raw materials and do not create unwanted waste materials.

• We monitor for 22 environmental and oxidative impurities. Testing shows that 75% of these are repeatedly below the detection limits set by leading independent labs.
• All Epax products surpass standards set by the IFOS (International Fish Oil Standards) 5-star rating certification programme.
• We have already increased the maximum achievable level of concentration through distillation and raised the industry standard of 50 weight per cent to 60 weight per cent. Our in-house R&D team has recently increased concentration levels to 70 weight per cent, and we will continue to develop this process.

Maximum specification limits for environmental pollutants

We sort out waste that is not part of our direct production – paper, cardboard, plastic, Styrofoam, and food – and send it to be recycled at a local facility. The small fraction of chemicals we cannot handle ourselves is managed by specialist services. In this way, we effectively utilise all our raw materials and align with specific SDG 12 targets: 12.2, to sustainably manage and efficiently use natural resources; 12.4, to responsibly manage chemicals and waste; and 12.5, to substantially reduce waste generation.

Our by-products are mainly used for feed, fertiliser, biogas and industry oil. The material used to produce biogas is transported by truck to a biogas facility. Feed oil is sent by boat to a local producer of feed products, where it is mainly used as an additive to salmon feed. The industrial oil is delivered to a facility where it is cleaned and sold to handlers of this product.

Urea is used as a cost-effective alternative to commercial fertiliser at local farms. We collaborate with a neighbouring firm that makes a mixture of urea and animal stool, and field studies have concluded that this works well as a fertiliser.⁵
For Epax, this is another step towards a genuinely circular bioeconomy.

⁵ Synnes, 2022. www.hogsteinagro.no/_files/ugd/06213e_c68e7c8b2e6b4130bad73955bb9d186a.pdf

When our by-products are used locally, there is also a lower environmental impact in terms of transport. By delivering to facilities close to our factory since 2021, we have achieved an overall reduction of 90,000km in road transport and over 2600 tonnes of CO₂ a year. 

Future goals

• In 2023 we will increase our biomaterial circularity to 98%.
• From 2023, we will conduct regular audits of our waste contractors. By 2025, we will maintain our circular bioeconomy by continuing our development of by-products into valuable resources.

Our employees are our most valuable assets – we rightly see our people as investments, not costs.

We are highly focused on social sustainability across our supply chain, meeting specific targets within SDG 8 for our employees. In particular, we are aligned with target 8.5, for full employment and decent work with equal pay; 8.7, taking action to end modern slavery, trafficking, and child labour; and 8.8, protecting labour rights and promoting safe working environments.

We operate according to the Norwegian Working Environment Act (NWEA) 2005. This tightly regulates working conditions across the Norwegian labour market and is monitored by the Norwegian Labour Inspection Authority. It protects employees’ rights and covers gender equity, the working environment, working hours, vacation, leave, appointments, and rules for resignation. Key points include: 

• Working hours should not exceed nine hours in any 24-hour period and no more than 40 hours in any seven-day period. Strict regulations must be followed if there is an operational requirement for deviation from this standard.
• Child labour in any form is forbidden.
• Parents have the right to parental benefit – a combined total of 48 weeks of paid leave in connection with pregnancy, childbirth and adoption. In addition, each parent is entitled to one year of leave for each birth, taken directly after the baby’s first year.
• All employees must receive a contract that clearly describes their role, and payroll documentation that clearly shows their working hours, pay, and tax.
• Employees have a right to participate in co-determination at the workplace, including through trade union membership.

We also have our own health, safety and environment (HSE) policy framework. We set annual HSE targets, with progress evaluated as part of our annual review process and results made visible to the entire organisation. Our HSE procedures are subject to monitoring by the Norwegian government under the Internal Control Regulations 1996.

36% of our workforce is female. 40% of our board members are female, compared to a European average of 30.7% and a Norwegian average of 35%.⁶ We aim to increase the number of women in our workforce and on our board through revised recruitment processes.

⁶ https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Risk/gx-risk-wob-europe-180222.pdf, Deloitte, 2022

As a Norwegian company, we are accustomed to operating within robust legal and ethical frameworks. It’s in our DNA – and our country’s DNA.

Meeting our obligations under the Norwegian Transparency Act

We run our business strictly within the framework of the Norwegian Transparency Act, which came into force in July 2022. The Act requires companies in the Norwegian market with annual consolidated revenue of at least NOK 70 million and more than 50 employees to publish an annual transparency report. This describes their actions to assess and address risks to decent working conditions at any suppliers or subcontractors from which they buy goods or services. The process is intended to help Norwegian businesses manage their modern slavery risks and maintain responsible and transparent supply chains.

The Transparency Act is based on the UN’s Guiding Principles on Business and Human Rights, and the OECD (Organisation for Economic Co-operation and Development) Guidelines for Multinational Enterprises, which outline businesses’ responsibility for decent working conditions and human rights. This includes acting to prevent, mitigate and, where appropriate, remedy modern slavery within operations and supply chains.

Anti-corruption strategy                                               

Norwegian criminal law has a broad scope for tackling corruption, with both domestic and foreign trade, and the Transparency Act includes strict provisions to avoid corruption in the supply chain. We have rigorous internal guidelines to prevent corruption anywhere in our supply chain. Employees are trained in our procedures to ensure they are vigilant when purchasing, and large purchases are subject to stringent guidelines.

Traceability

The traceability of marine ingredients is crucial for sustainability and quality at every stage of our supply chain. This requires extensive tracking and global monitoring of the fishing, transportation and manufacturing process.

All the crude oil and marine ingredients we buy are FOS and MarinTrust certified, and the stock is sustainable, according to the International Union for Conservation of Nature.⁷ As part of Pelagia’s vertically integrated supply and manufacturing chain, we can guarantee quality control and trace our ingredients from the ocean to our finished products.

⁷ IUCN, 2020

Governance audits

Epax has a threefold auditing process.

1.     Supplier audits

Having control over our supply chain is essential for good governance. To this end, we conduct both physical audits and remote audits, which have become standard practice since the pandemic.

We regularly audit our suppliers and overseas storage facility to ensure products are stored correctly and under stable conditions. Maintaining long relationships with our suppliers enables us to gain a deeper understanding of their operations and ethos.

We also risk-assess our suppliers for geographical, industry and product risks via questionnaires and audits to ensure they comply with the Transparency Act. Geographical risk refers to countries or regions where the UN believes human rights are being violated and where there are no decent working conditions. Industry risk concerns business areas where human rights violations are known to occur. Product risk refers to the production of goods in countries where it is likely that rights to decent work are not observed.

2.     Internal audits

We conduct regular internal audits. These include our HSE annual review process.

3.     External audits

We undergo regular third-party inspection and evaluation to prove that we operate safely, both in terms of sustainability and quality for our customers. We also invite all our partners and customers to audit us whenever they want.

• In 2008 we became the first Omega-3 ingredient company to receive Friend of the Sea sustainability certification. This verifies that our fish products originate from fisheries managed in a responsible and sustainable way.
•  We are certified by MarinTrust, an international, third-party verification programme for marine ingredient certification. MarinTrust champions best practice and responsible business conduct in the sourcing and production of marine ingredients.
• Our environmental management system is DNV-certified ISO 14001, the most widely recognised international standard for environmental management systems.
• Our factory is approved by the Norwegian Medicines Agency for the manufacture of Active Pharmaceutical Ingredients (APIs) and inspected by the US FDA (Food and Drug Administration) for manufacturing pharmaceutical ingredients
• We comply with the EU’s REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) directive to provide a high level of protection of human health and the environment from the use of chemicals.

Future goals:

• In accordance with our requirements under the Transparency Act, Pelagia and Epax will publish a report of our assessment of human rights and decent working conditions within our supply chain by June 30, 2023.