Our Business Model

Toward a Low-Carbon Society
We seek to reduce CO2 emissions by 80% compared to fiscal 2010 levels by fiscal 2050 to realize the drop in
global anthropogenic GHG emissions that was deemed necessary in the IPCC’s Fifth Assessment Report. We
will attain this target throughout our value chain. First, this will be achieved by decreasing emissions during
the usage stage of our products and solutions, which account for a substantial share of emissions in thevalue chain. We will contribute to our customers and to society by developing innovative technologies andsolutions, as well as enhancing the efficiency of our products and supplying low-carbon energy. At the sametime, we will also work to cut down on emissions at the production stage of our business activities.

Reduction of CO 2 Emissions During Use

35% CO2 emissions reduction rate by promoting environmentallyconscious designs and expanding sales of products and services
with high energy-saving functions.
Reduction in CO2 Emissions
FY 2010 (base year)
CO2emissions
Functionsize*

From base year

100％ 35 %reduction＝FY 2016
CO2emissions
Function
size

65％

＝

Strategic Focus

Hitachi is improving the environmental performance of its products
and services with the hope of contributing to the resolution ofenvironmental challenges through the development andpopularization of products and services with high environmentalvalue. We strike a balance between improving functionality andreducing the environmental burden by using, as our index, thereduction rate per product and service function of CO2 emissions
during usage and of the volume of resources used during the life
cycle. The group of products that demonstrate a high level ofpotential in solving environmental issues are the targets of a planto achieve a 40% reduction in CO2 emissions by fiscal 2018(compared to fiscal 2010 products). In fiscal 2016, we attained a

CEO Message

Improved Environmental Performance in Products and Services* Major functions of products correlated to CO 2 emissions.

Environmentally Conscious Design Assessments
keeping abreast of environmental regulations and ascertaining theenvironment-related needs of our stakeholders. We conduct life
cycle assessments focusing on our main, priority products toquantitatively evaluate their burden on the global environment insuch areas as the consumption of mineral resources, fossil fuels,and water resources, as well as their impact on global warming
and air pollution. The results of such life cycle assessments aredisclosed to our stakeholders and utilized in improving the designof next-generation products.

Value Creation

We conduct Environmentally Conscious Design Assessments for
all products and services involving a design process to ensure
environmentally conscious design and development. Thirty
environment-related areas are assessed for their impact on climatechange, resource depletion, and environmental pollution(ecosystem degradation) at each stage of the product life cyclewith a view to reducing the environmental burden. To meet the IEC
62430* criteria for environmentally conscious design, in addition toimplementing these assessments, we are advancing
environmentally conscious design and development by integrating
this process into our existing management system, such as by* The standard developed by the International Electrotechnical Commission
concerning environmentally conscious design for electrical and electronic products.

Products and Solutions that Help Create a Low-Carbon Society

An oil-immersed transformer (left) and molded transformer.

Energy savings

26

MWh/year* Comparison of loss between Hitachi’s silicon steel transformer andamorphous transformer (3,000 kVA capacity, 22 kV/6.6 kV, 50 Hz models
at 40% load factor).

Hitachi, Ltd. Integrated Report 201769

Performance

Transformers convert the high-voltage electricity produced at power
plants into low-voltage electricity that can be used more safely. Since
voltage is applied to the coil where electricity is flowing so thatelectricity can be used at any time, the occurrence of no-load loss
(standby power) in which power is lost even when electricity is not
being used cannot be avoided. Decreasing the no-load loss oftransformers that operate 24 hours a day, 365 days a year, over amean lifespan of about 25 years could lead to huge energy savings.
Hitachi Industrial Equipment Systems Co., Ltd. uses anamorphous alloy with outstanding magnetic properties in the ironcores around which coils are wound. This has resulted in an annual
reduction of about one-fifth in no-load loss compared with previous
silicon steel transformers* and an annual reduction of 26 MWh in
total loss, including load loss, during use.

Management & Governance

Reducing CO2 Emissions Through Energy Savings
Amorphous TransformersReducing CO2 Emissions with Renewable Energy
Down-wind Turbine System
Hitachi has installed 162 wind turbines in Japan (as of February28, 2017) and is actively developing this business to contribute to
the growth of the renewable energy sector. In Hitachi’s originaldown-wind system, the rotor is on the downwind side of thetower. The system’s weather vane effect enables turbines toswitch to the free-yaw operation mode in blackout conditions,such as during storms, preventing the dangers posed by crosswind. The characteristic makes the down-wind system very safe.
Down-wind turbines also generate energy efficiently by capturing
upward blowing winds in mountainous and hilly areas.
At a new wind power plant of the Aoyama-Kogen Wind FarmCorporation, located on the Aoyama plateau in Mie Prefecture,Hitachi supplied 40 down-wind turbines. The output is 80 MW, thelargest in Japan.*1 Hitachi is also taking part in research for theFukushima Floating Offshore Wind Farm Demonstration Project ofthe Agency for Natural Resources and Energy, Ministry ofEconomy, Trade, and Industry.

A 5 MW floating wind turbine(courtesy of the Fukushima Offshore Wind Consortium).

330 kt-CO /year*

CO2 emissions
reduction amount22(amount for the 162 wind power
turbines installed by Hitachi)*1 According to a list of wind power generation facilities installed in Japan(as of March 31, 2016), compiled by the New Energy and Industrial
Technology Development Organization (NEDO).
*2 Comparison with LNG thermal power generation. Calculated from the life cycle
CO 2 emissions for each type of power generation listed in the Evaluation ofLife Cycle CO 2 Emissions of Power Generation Technologies, published by theCentral Research Institute of Electric Power Industry (July 2010).

Reducing CO2 Emissions During Transport
Railway Systems
Among the various modes of transportation, railways have among
the lowest CO2 emissions. As a comprehensive railway systems
integrator, Hitachi is a global provider of railcar and transportsystems, including signaling and train management systems, andwill continue to deliver total railway systems for greater efficiency
and environmental consciousness.
Hitachi’s aluminum A-train rolling stock is lighter thanstainless steel rolling stock, for example, enabling trains to run
at high speeds with less energy. Outside of Japan, A-train
production has also begun in a UK plant and additional orders
have been received for 63 AT-300 cars for a railway insouthwest England. Together with an order received in July
2015, the total is for 236 cars (36 trains).
The use of silicon carbide (SiC) in carriage inverters reduces
energy loss during operation and cuts mass and volume by 40%.
Energy savings are achieved through both lower electrical energy
use and the contribution of these inverters to lighter rolling stock.

An AT-300 train for a UK railway company.

CO2 emissions pertransport unit(passenger)

Railwayemissions
are about1
7

those ofautomobiles** From Ministry of Land, Infrastructure, Transport, and Tourism data on CO 2
emissions in the transportation sector.

Reducing CO2 Emissions by Improving Automobile Fuel Efficiency
Lithium-Ion Battery Packs
Automobile CO2 emissions are a major environmental issue, andfuel efficiency is being improved through various technologies.
Hitachi Automotive Systems, Ltd. has developed a 48Vlithium-ion battery pack for mild hybrid vehicles. An output density
1.5 times existing levels has been achieved by improving thematerial composition of the positive and negative electrodes andincreasing the amount of lithium that can be stored per unit ofweight. This not only enhances the motor’s torque performance forassisting acceleration but also enables the recovery of substantial
regenerative energy when decelerating and reduces energy loss.
Hitachi contributes to reduced CO2 emissions throughimproved automobile fuel efficiency by providing storage batteries
and other energy-saving automobile parts.

70

Hitachi, Ltd. Integrated Report 2017

A 48V lithium-ion battery pack for mild hybrid vehicles.

48V lithium-ion battery packenergy density

1.5times previousproductCEO Message

With these efforts the energy use per unit has been decreased
32% compared with fiscal 2010 at the company’s main plants in
Ibaraki Prefecture, contributing to a significant reduction in electricpower costs.

Tsuchiura Works East Building and the Hitachi UH03 hydraulic excavator,
which is included in the list of Japan’s Mechanical Engineering Heritage.

Energy use per unit

32% reduction comparedwith fiscal 2010

Reduction in Energy Use per Unit

Activity
amount*2

From base year

100％ 12 %reduction＝We are promoting the use of solar, wind, and other forms ofrenewable energy. During the 2016 fiscal year, Hitachi produced
2,925 MWh of renewable energy for its own use. Hitachi
Computer Products (America), Inc. proactively uses renewableenergy to power its factory, purchasing 8,769 MWh during fiscal
2016. In Japan, we contracted for 1,000 MWh/year of GreenPower through Japan Natural Energy Co., Ltd. to provide powerfor offices, showrooms, and exhibitions.

CO2 Emissions(kt-CO2/year)
5,000

4,000

3,845
3,453

3,355

3,311

3,085

＊

3,000

Management & Governance

FY 2005 (base year)
Energy used
1.75 GL*1Introducing Renewable Energy

Value Creation

We are working to reduce energy use per unit—an indicator ofenergy efficiency—by systematically improving efficiency, such as
by installing high-efficiency equipment and devices, from LED
lighting to inverter air conditioners, at each facility. In fiscal 2016,
we achieved an improvement of 12% (from a base year of fiscal
2005), against a target of 15%. Part of the reason for not hitting
the target was because of a decline in sales in energy intensive
business divisions, which contracted the denominator in
calculating energy use per unit.
The increase in the total volume of CO2 emissions was due tothe fact that a materials company in the Americas newly became amember of the consolidated Hitachi Group in fiscal 2016. There
was a general decline in regions other than the Americas.
We will continue to harness our expertise in control and IT
technologies to actively pursue energy conservation measures atour factories and offices and promote the efficient use of energy.

Strategic Focus

Reduction of CO 2 Emissions During the Production StageFY 2016
Energy used
1.95 GL
Activityamount88％

2,000＝*1 Energy volume used both in and outside the organization (SCOPE 1 and 2).
*2 A value closely related to the emission factor numerators (environmentalburden) of energy use from business activities (for example, production
quantity, output, building floor space, and number of employees).

1,0000

2012

Japan

Rest of Asia

2013

2014

2015

ChinaAmericas

2016

(FY)

Europe* Includes 958 kt-CO 2/year emitted by a materials company that became
a consolidated member of the Hitachi Group in fiscal 2016.
Notes:• The CO 2 electrical power conversion factor uses the 2005 emissioncoefficients for individual countries published by the International Energy
Agency (IEA) in the 2010 edition of CO 2 Emissions from Fuel Combustion.
• Energy-related CO 2 emissions were 1,296 kt-CO 2 (SCOPE 1) and 2,549
kt-CO 2 (SCOPE 2).

Hitachi, Ltd. Integrated Report 201771

Performance

Hitachi Construction Machinery Co., Ltd. uses a network ofJapanese and international affiliates centered on four main plants
in Japan to produce construction machinery and its principal
components. Together with energy reductions during use as theseproducts switch to electric or hybrid power, efforts throughout thenetwork are also being made to reduce energy consumption in the
manufacturing stage.
The entire Hitachi Construction Machinery Group continues toimplement energy-saving measures and promote greater efficiency
in plant and office lighting and air-conditioning. Several locations
have also introduced IoT technology to further reduce energy
consumption and raise productivity. Specifically, by adopting theEnergy and Equipment Management Service, a key solution
concept under Hitachi’s Lumada IoT platform to comprehensively
control energy data and equipment across multiple businessfacilities, they are able to efficiently analyze and manage electric
power data gathered from equipment at each plant. Energy usage
by the machine tools, robots, and other production equipmentused in plants is finely controlled, reducing standby power andincreasing energy efficiency.

Our Business Model

Reducing CO2 Emissions Through Greater Efficiency with IoT
Building Eco-Factories with Lumada