Responding to Climate Change

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• Responding to Climate Change

• The Path Toward Achieving Carbon
  Neutrality by FY2050
• CO₂ Emissions in FY2023
• Measures to Reduce CO₂ Emissions

The Path Toward Achieving Carbon Neutrality by FY2050

The social and economic impacts of climate change are becoming increasingly severe, and efforts to curb rising temperatures by transitioning to a decarbonized society are accelerating around the world. Our Sustainability Committee has taken the lead in measuring and promoting efforts to reduce CO₂ emissions toward carbon neutrality.

CO₂ Emissions in FY2023

In FY2023, domestic Scope 1 and 2 CO₂ emissions totaled 247,000 t-CO₂, a reduction of roughly 24,000 t-CO₂ from the previous fiscal year. The main reason for the reduction is that we cut energy-derived CO₂ emissions (roughly 18,000 t-CO₂) by converting a substantial shift to renewable energy (roughly 5,000 t-CO₂, Market-based) for purchased electricity through FIT Non-Fossil Certificates, which we began purchasing in FY2023, and by decreasing energy consumption. Additionally, quicklime, which is produced by calcining limestone, decreased, resulting in a decrease in non-energy-derived CO₂ (roughly 6,000 t-CO₂).

Results of reducing CO₂ emissions and goals from domestic Group^*

1. * Domestic (including Group companies) Scope 1 and Scope 2 emissions calculated using emissions factors based on the Act on Promotion of Global Warming Countermeasures.
* Due to a change in the calculation method, figures above have been retroactively adjusted.

Measures to Reduce CO₂ Emissions

We are promoting several measures to successfully travel the path set out on our roadmap to carbon neutrality. The measures include our switch to renewable energy-derived electricity for the entirety of the purchased electricity for our head office in the Yusen Building in October 2022 as well as the following. We intend to continue to expedite our efforts to reduce CO₂ emissions.

Introducing an Internal Carbon Pricing (ICP) System

In November 2022, we introduced an ICP system with the transaction price of 20,000 JPY/t-CO₂ on capital investment across the Group (revised in June 2024). The ICP system encourages low-carbon investment and capital investment for decarbonized management by converting CO₂ emissions associated with capital investment plans into a cost—an internal carbon price—to inform investment decisions. We will apply the ICP system to the installation of equipment—for example, energy-saving equipment and renewable power generation facilities for internal consumption—to promote capital investment that helps reduce CO₂ emissions.

Installing Renewable Power Generation Facilities for Internal Consumption

We are considering installing power generation facilities for internal consumption based on renewable energy sources (solar, wind, small-scale hydropower) at all Group locations. We are in the process of verifying in due order the technical and economic aspects and CO₂-reducing effects of installing power generation equipment on idle land at quarry complexes and the like and on the roofs of factory buildings and offices, and we plan to use the ICP system and other resources to install power generation facilities first and foremost at locations where such installation is deemed to be feasible.

Status of considerations for installing renewable power generation facilities for internal consumption

Substantial Shift to Renewable Energy for Purchased Electricity through FIT Non-Fossil Certificates

In FY2023, we began purchasing FIT Non-Fossil Certificates^*1 with tracking^*2 for our FIT solar power plants^*3 to key a substantial shift to renewable energy for a portion of purchased electricity for the Torigatayama Quarry Complex. We purchased FIT Non-Fossil Certificates of roughly 12,000 MWh and achieved a substantial shift to renewable energy for a portion of purchased electricity. We will continue to purchase FIT Non-Fossil Certificates from FY2024 onwards and strengthen for CO₂ emissions reductions^*4.

1. *1: FIT Non-Fossil Certificates
   Certificates showing the environmental value of renewable energy and other non-fossil electricity sources and certifying the non-fossil value of electricity generated at renewable energy power plants under the FIT system
2. *2: Tracking
   Attribute data of power plants (e.g. IDs, names, and installers of power generation facilities)
3. *3: FIT solar power plants
   Solar power plants under the Feed-In Tariff (FIT) system for renewable energy that generate electricity that electricity utilities purchase for a fixed period of time at prices determined by the government
4. *4: CO₂ emissions reductions
   Calculated based on the estimated number of NFCs purchased and the emission factor for purchased electricity for the Torigatayama Quarry Complex (for reporting in FY2023) under the Act on Promotion of Global Warming Countermeasures