Nippon Light Metal Group’s
Carbon Neutrality Strategy

November 14, 2023
Nippon Light Metal Holdings Co., Ltd.

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Carbon Neutrality Strategy

Progress of Activities for Achieving Carbon Neutrality
Nippon Light Metal Group’s Carbon Neutrality Strategy

By fiscal 2030, reduce emissions by
30% compared to fiscal 2013 (Scopes 1, 2, and 3)
I. Risks and Opportunities Brought About by Decarbonization➡ Increased expectations for aluminum in the transition to a decarbonized society
II. Policy and Strategy➡ Current analysis: Understanding greenhouse gas emissions across the supply chain andidentifying priority measures➡ Strategy formulation: Setting reduction targets and concrete implementation measuresfor Scopes 1, 2, and 3 emissions[Addenda] ① Collaboration within the Group for establishing a closed loop supply chain

Fiscal 2050
Carbonneutrality② Collaboration with customers for establishing a closed loop supply chain

III. Carbon Neutrality (CN) Promotion Structure➡ Establishment of Green Growth Strategy Office (Command Center) andMetal Division (Execution Unit)➡ Future approach: Creation and publication of a roadmap / Establishment ofsubcommittees within the Green Growth Strategy Office
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2Carbon Neutrality Strategy

1. Risks and Opportunities Brought About by Decarbonization
The increasing expectations for aluminum in the transition to a decarbonizedsociety
Movement towards carbon
tax implementation

CO2 emissions = increased costs

MarketDemands

SCOPE 3SCOPE 1 & 2Risks

Opportunities

Taxation on energy costs according to CO2emissions* Based on precedents in Europe, there is apossibility of a 10,000 yen/t-CO2 tax.

Low-carbon demandfor materials throughrecycling
The progression of EVs in automobiles
leads to increased vehicle weight due tobatteries. Thus, lightening vehicles andparts through aluminum use.

Demand for lighter
vehicles due to EV
adoption

Aluminum is recycle-oriented material due to its
low melting point. Aluminum can contribute torealizing a decarbonized society through thepromotion pf recycling.
CO2 emission reduction through recycling
Collection & sorting

Aluminum products

Recycling routeCO2 emissions at thetime of recycling
Approximately

Aluminumsecondary alloy
ingot

10％

Melting & casting*Based on 100% emissions during the production of aluminum primary alloy ingot

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Carbon Neutrality Strategy

2. Policy and Strategy Current Analysis
Analysis summary

Simple methods for grasping the overall sense of CO2emissions*➡ Identifying priority measures for each Scope

Fiscal 2013 CO2emissions

Scope 1 & 2

680,000
t-CO2*The target of CO2 emission calculations is the domestic operations of the NLM Group.

Scope 1 & 2 CO2 emissions

Appropriateemission
monitoringEnergy saving +renewable energytransitionScope 1 300,000t
Scope 2 380,000t
Scope 3 CO2 emissions

2.04
milliont-CO2

Other (alumina hydrate,etc.) 380,000 t-CO2RollingSlabs

Primary alloy ingot
1.66 million t-CO2

Casting

Aluminum Ingot
and Chemicals

zz

Scope 3emissions

81% of emissions originate from aluminum primary alloy ingot
Aluminum primary alloy ingots are almost exclusively used forextrusion and rolling processing

Aluminum
Sheet andExtrusions

Coils & sheets

Low-carbonizationof extruded androlled materials

Extrusion
BilletsExtrusion
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Carbon Neutrality Strategy

2. Policy and Strategy

Nippon Light Metal Group’s Approach to Decarbonization
Strategy Formulation

Building a closed loop supply chain is important to our decarbonization strategy as well
Fiscal 2013 CO2emissions

30% reduction
Scope 1 & 2
680,000 t-CO2

30% reduction

Scope 3emissions

2.04
milliont-CO2(1) Reduction of greenhouse gas emissions in own production process (Scope 1 & 2)
Energy saving: facility improvements leading to improved fuel intensity
Renewable energy: transition from fossil fuels to renewable energy(2) Reduction of greenhouse gases in the supply chain (Scope 3)
Low-carbon import materials (including green aluminum)
Increased use of scrap (mainly in the extruded and rolled material field)⇒ Construction of a closed loop supply chain
 Collaboration within the Group Collaboration with customers
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Carbon Neutrality Strategy

2. Policy and Strategy

Collaboration Within the Group for Establishinga closed loop supply chain

Business operation in diverse field would be a strength to build to a closed loop supply chain
From upstream to downstream invarious business domains
Aluminum Ingotand Chemicals
Primary alloy ingot(includingbillets/slabs)
Rolling,
extrusion
Slabs

Extruded androlled materials
FabricatedProducts

Coils &sheets

Billets

secondary alloy
ingot
Casting,
forging, diecasting
Secondaryalloy

Advanced sorting technology

Aluminum Sheetand Extrusions

FabricatedProductsand Others

Aluminum material
technology(Nikkei Research andDevelopment Center )Maximizing the use ofaluminum scrap as amaterial within theGroup

Extrusion
shapes

Cast/die-castmaterial
FabricatedProducts

Extruded androlled material
scrap

Market scrapRecycling technology(Nikkei MC Aluminum)

Cast/die-castmaterial scrap

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Carbon Neutrality Strategy

2. Policy and Strategy

Collaborating with Customers to Establish
a closed loop supply chain

Building a collaborative closed loop supply chain creates value for customers
Bullet train to bullet train
Greening of truck bodies
CO2 reduction
per train
Bullet train
vehiclesAluminum scrap

50t-CO2
reduction
Vehicle structures

Billets

Truck bodies

Aluminum scrap

Body

Billets

per truck

8t-CO2

reduction

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7Carbon Neutrality Strategy

3. Establishing Structure to Promote Carbon Neutrality
・ Establishment of Green Growth Strategy Office: creation of a Group-integrated decarbonization strategy
・ Integration of Metal Division: reorganization of the Aluminum Material Department, key to decarbonization➡ Establishing an integrated and agile decarbonization promotion structure
HD Board of Directors
HD President[Nippon Light Metal HD] Main body for creating the Group-integrated
decarbonization strategy

BusinessTransformationOffice

ExecutiveCommittee

Green Growth Strategy OfficeReduction of SCOPE 1 & 2emissionsReduction of SCOPE 3
emissions
Planning

Promotion of horizontal
recycling
Execution

Nippon Light Metal
The executive organization for promoting
decarbonization using aluminum materials

Nikkei MC Aluminum

Collaboration

Metal Division
Reduction of SCOPE 3
emissions

Promotion of horizontal
recycling① Formulation and promotion ofdecarbonization strategies
The Green Growth Strategy Office established as themain body for creating an integrated strategy within theHD organization, responding to a diverse array ofbusiness developments② Executing promotion of thedecarbonization strategy
To reduce scope 3 emissions from aluminum materials,
procurement/manufacturing/sales of them should bemanaged as if one team. We integrated these function
as Metal Division, which will be execution division forrecycling and reducing Scope3 emissions.
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8Carbon Neutrality Strategy

3. Establishing Structure to Promote Carbon Neutrality

Appropriate
emissionmonitoringEstablishment of data collection
system*Utilizing DX Setting up subcommittees within theCN promotion office for each Groupwide strategy theme
Organizing➡ Implementation support andmeasuresprogress managementand establishingpromotion
organization

Creation ofdecarbonization
strategy androadmap
Steadily
implementing
decarbonization
measures

Where to Go fromHere Announcement of decarbonization
strategy and roadmap*Planned for fiscal 2024

 Track the progress of measures➡ Disclose progress in a timely manner

Current proposal fororganizing
subcommittees

Green Growth
Strategy Office
Formulation and promotion ofcomprehensive decarbonization strategies

Preparing the environment for
carbon neutrality promotion
Formulating strategies forcarbon offsetting
Reduction of own emissions(energy conservation &renewable energy)

Scope 1 & 2reduction

Low-carbon material
procurement/management

Scope 3emission
reduction

Promotion of recycling of
extruded and rolled materials

Scope 3emission
reduction

Responding to customer
recycling requests

Scope 3emission
reduction

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