Daio Paper Corporation Green Bond Report (FY2022)
1. Overview of green bonds issued by Daio Paper Corporation

Unsecured Straight Bond No. 21 Unsecured Straight Bond No. 22(Issued in Japan)(Issued in Japan)Term

7 years

10 years

Amount issued

15 billion yen

5 billion yen

Issue date

October 25, 2018

October 25, 2018

Maturity date

October 24, 2025

October 25, 2028

Use of proceeds(Green projects)
Lead managers
Second-party opinion

Facilities for utilization of hard-to-recycle waste paper
Black liquor-fueled biomass boiler power generation systemsMitsubishi UFJ Morgan Stanley Securities Co., Ltd.
Daiwa Securities Co., Ltd.
Obtained from DNV GL Business Assurance Japan K.K.

Reference URL: Daio Paper website’s Credit Rating and Bond Information page. (Information andmaterials on green bonds are available in the bottom section of the page)

2. Use of proceeds
1) Status on the use of the proceeds from the green bonds
The allocation of the proceeds was completed in February 2020.

3. Status of projects
1) Facilities for utilization of hard-to-recycle waste paper(1) Overview of facilities
This project involves the construction of a new facility and the renovation of an existing
one to enable the processing of hard-to-recycle waste paper, which has usually been
disposed of, for reuse as raw material for paper by utilizing our waste paper processing
technologies.
Click here [Daio Paper website’s Waste Paper Recycling section] for information on our initiatives for
Effective Use of Resources.

(2) Use of proceeds
Total amount invested:

21.1 billion yen

Financed by the proceeds from green bonds:

9.0 billion yen(Total amount to be financed by the proceeds fromgreen bonds:

9.0 billion yen(3) Status of progress on the project
The project proceeded as initially planned and all the facilities were brought into operationin April 2020.
(4) Environmental impact➢ Volume of waste paper reused*1
This represents the total volume of hard-to-recycle waste paper reused in the green bondsfinanced facilities of Daio Paper Corporation (Mishima Mill) and its subsidiary, Iwaki
Daio Paper Corporation.

In FY2022 (April 2022-March 2023), we reused 198,032t of hard-to-recycle waste paper.
We will continue to strive to further utilize hard-to-recycle waste paper.

➢ Electricity generated by thermal recycling of plastics, etc. screened out in the process ofprocessing hard-to-recycle waste paper: 7,087ＭＷh/year *2➢ CO2 emissions reduced through the entire process of utilizing hard-to-recycle waste
paper: 149,634t-CO2/year *3
2) Black liquor-fueled biomass boiler power generation systems(1) Overview of facilities
This project involves the construction of biomass boilers fueled by black liquor, which is
obtained by concentrating resin-containing waste liquor generated in the process of pulping
wood chips.
(2) Use of proceeds
Total amount invested:

21.9 billion yen*4

Financed by the proceeds from green bonds:

11.0 billion yen(Total amount to be financed by the proceeds from greenbonds:*4

11.0 billion yen)(3) Status of progress on the project
The project proceeded as initially planned and the biomass power generation systems werebrought into operation in July 2020.
(4) Environmental impact
CO2 emissions are expected to be reduced as shown below, compared to fossil fuel-fired powergeneration.

➢ Biomass boiler’s power output: 423,976MＷh/year➢ Actual CO2 emission reductions based on the above power output: 169,896t-CO2/year *5(Notes)*1:

From fiscal 2021, we are partially revising the contents of the category of hard-to-recycle waste paper*2:

Plastics and other organic substances screened out in the process of processing hard-to-recycle waste paper
are thermal recycled, i.e., incinerated to generate heat, which is used for power generation and in the courseof paper making (for drying, etc.).

*3:

In computing the CO2 emission reduction effect, the CO2 emission coefficients for FY2022 published byShikoku Electric Power Co., Ltd. and Tohoku Electric Power Co., Ltd., respectively serving the areas in which
Daio Paper Corporation’s Mishima Mill and Iwaki Daio Paper Corporation are located, are used for reference.
The reported CO2 emission reduction effect is adjusted for the impact of the following factors contributing
to CO2 emissions (aggravating factors):
1) CO2 emissions generated during the transportation of hard-to-recycle waste paper2) Inorganic substances that are screened out in the process of processing hard-to-recycle waste paper andcannot be thermal recycled (inorganic substances screened out in the process of processing paper peeled
off from gypsum boards)
3) CO2 emissions generated in the process of thermal recycling
The CO2 emission reduction effect represents the degree of improvement, i.e., a decrease in CO2 emissions,compared to our base year of FY2016, which was designated as the reference year at the time of issuance ofthe green bonds.

*4:

Out of the amount invested, 9.0 billion yen was financed by the proceeds from the euro yen-denominatedconvertible bonds with subscription warrants issued in September 2015.

*5:

In computing the CO2 emission reduction effect, the CO2 emission coefficient for FY2022 published by
Shikoku Electric Power Co., a utility serving the area in which our Mishima Mill is located, was used forreference.
The reported CO2 emission reduction effect is adjusted for the impact of the following factors contributing
to CO2 emissions (aggravating factors):
1) CO2 emissions arising from the use of Type A heavy oil in activating and deactivating the facilities
2) CO2 emissions based on the amount of electricity that needs to be generated for operating the biomassboilers