JERA Co., Inc. JERA Transition Bond Framework Second Party Opinion Rev1.0

SECOND PARTY OPINIONJERA CO., INC.
JERA TRANSITION BOND FRAMEWORK

Prepared by: DNV Business Assurance Japan K.K.
Location: Kobe, Japan
Date: 12 May 2022
Ref. Nr.: PRJN-333948-2022-AST-JPN-01_Rev1.0

This report was prepared in the “Climate Transition Finance Model Project in FY2021 (Investigation of ideal
way of Transition Finance)” which is a commissioned project by the Ministry of Economy, Trade and Industry.
As Revision 1, this includes formal modifications due to changes in JERA's operational system and an
additional evaluation in May 2022 of JERA's new target setting eligibility as a transition bond. (Additional partin accordance with Revision 1 are underlined.)

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JERA Co., Inc. JERA Transition Bond Framework Second Party Opinion Rev1.0

Executive Summary*This report (Revision 1) is an additional evaluation of the eligibility as a transition bond withrespect to the new target set due to the establishment of “JERA Environmental Target 2035”
in May 2022 and the update of “JERA Zero CO2 Emissions 2050 Roadmap for its Business inJapan”.
JERA Co., Inc. (hereinafter, JERA, including JERA Group or the issuer) was established on
April 30, 2015 to form a comprehensive alliance between Tokyo Electric Power Company (asit was known then) and Chubu Electric Power Co., Inc. for their entire supply chains fromfuel upstream and procurement business to power generation. JERA established a unified,continuous value chain from fuel upstream and procurement business to power generationand electricity and gas wholesaling, earning its status as an energy company with power
generation capacity equivalent to half of Japan’s thermal power generation output and a fueltransaction volume among the world’s highest. JERA engages in borderless management of
all businesses from fuel procurement to power generation and sales in three profit centers,
which are “Business development,” “Optimization,” and “O&M･Engineering,” to establish asystem capable of pursuing expertise and excellence and maximizing synergy in eachbusiness.
JERA has established “JERA Zero CO2 Emissions 2050” in October 2020, the goal ofachieving zero CO2 emissions by 2050. Under “JERA Zero CO2 Emissions 2050”, JERA willtake on the challenge of achieving, by 2050, virtually zero CO2 emissions from JERA’soperations in Japan and overseas by taking the three following approaches: 1.
Complementarity between Renewable Energy and Zero CO2 Emission Thermal Power
Generation, 2. Establishment of Roadmaps Suitable for Each Country and Region and 3.
Adoption of “Smart Transition”. In addition, JERA established “JERA Zero CO2 Emissions
2050 Roadmap for its Business in Japan” that shows a pathway toward CO2 zero mission by
2050 of its business in Japan. To promote CO2 zero emissions in domestic operations inaccordance with this roadmap, JERA has formulated “JERA Environmental Target 2030” as
new environmental goals of FY2030 for its domestic operations. According to “JERA
Environmental Target 2030”, JERA has committed to reducing CO2 emission intensity by
20% compared to that of thermal power plants in Japan as a whole, based on the long-term
energy supply and demand outlook for FY2030 set by the government. JERA also committed
to shutting down/decommissioning all inefficient (supercritical or less) coal-fired thermal
power plants.
As stated in “JERA Zero CO2 Emissions 2050 Roadmap for its Business in Japan”, in order toachieve the realization of CO2 zero emissions, JERA will promote various R&D, verification,
introduction of technologies and facilities. Meanwhile, until the technologies and facilities arepractically available, JERA will pursue the CO2 emission reduction in the medium-term by
utilizing the decarbonization technologies. These efforts comply with the philosophy of
Climate Transition. "JERA Zero Emissions 2050 Roadmap for its Business in Japan" isconsistent with the transition roadmap for the electricity sector, which was developed by the
Ministry of Economy, Trade and Industry (hereinafter, METI) in February 2022 with the aimof promoting transition finance. JERA's roadmap also includes representative transition
projects outlined in the globally recognized handbooks, principles or guidelines related totransition finance.
In May 2022, JERA added a target to accelerate further its efforts to achieve the realizationof CO2 zero emissions, aiming to reduce CO2 emissions from domestic operations by at least
60% (relative to FY 2013) by FY 2035 with the establishment of the "JERA Environmental
Target 2035" and the update of the "JERA Zero CO2 Emissions 2050 Roadmap for its
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Business in Japan". Furthermore, JERA has developed a more ambitious transition strategy,
including clarifying the timing of full-scale operation at 20% and 50% ammonia co-firing
rates in thermal power generation, consistent with the transition roadmap for the electricity
sector of METI.

JERA has developed JERA Transition Bond Framework (hereinafter, "Framework") in order tofinance and refinance investments that contribute to the realization of “JERA Zero CO2Emissions 2050” in line with the established global handbooks, principles or guidelines.
DNV Business Assurance Japan K.K. (hereinafter, "DNV"), as an external reviewer,
evaluated the eligibility of the Framework and the JERA Transition Bond (to be issued in May2022).
Specifically, DNV provided the eligibility evaluation for the Framework against the following
handbooks, principles and guidelines which are widely recognized:- Climate Transition Finance Handbook (International Capital Market Association (ICMA),
2020, hereinafter CTFH)- Basic Guidelines on Climate Transition Finance (Financial Services Agency, Ministry of
Economy, Trade and Industry, Ministry of the Environment, 2021 hereinafter, CTFBG)- Green Bond Principles (International Capital Market Association (ICMA), 2021
hereinafter GBP)
- Green Bond Guidelines (Ministry of the Environment, 2020, hereinafter GBGLs)
The following is a summary of the assessment results for each common element indicated in
the above handbooks, principles and guidelines. CTF-1 ~ CTF-4 are findings and opinions of
DNV against the four common elements of the CTFH and CTFBG (disclosure elements);
GBP-1 ~ GBP-4 are findings and opinions of DNV against the elements of GBP/GBGLs
considering transition finance with Use of Proceeds instruments.
<CTF Eligibility Assessment Results>
CTF-1. Issuer’s Climate Transition Strategy and Governance:
The issuer, JERA, has set a long-term goal of CO2 zero emission by 2050, which isconsistent with the goal of the Paris Agreement, in “JERA Zero CO2 Emissions 2050”,
part of its transition strategy. The long-term goal is in line with the pathway stated in
the transition roadmap for the electricity sector of METI. Moreover, given the fact thatindirect emissions from power generation accounts for 38% of the CO2 emissions per
final energy consumption in Japan where JERA operates in, the transition strategy of
JERA, whose major emissions come from its thermal power generation, will not only
contribute to the emissions reduction from its own business activities (Scope 1 and 2),
but also the achievement of the decarbonization goals of diverse entities. In terms ofgovernance and disclosure related to the implementation of transition finance, aninternal structure and information disclosure process based on TCFD*1 have been
established. These are disclosed within the Framework and other documents, andmeet the disclosure element CTF-1. *1: Task Force on Climate-related Financial Disclosures
CTF-2. Business Model Environmental Materiality:
JERA identified materialities in order to solve social issues and increase its medium-tolong-term corporate value. JERA also utilizes the analysis and evaluation methods
based on GRI Standards*1, ISO 26000, TCFD, etc. As part of its efforts to addressenvironmental materiality, the activities contributing to transition, such as
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JERA Co., Inc. JERA Transition Bond Framework Second Party Opinion Rev1.0“Decarbonizing/expansion of renewable energy” and “Improved efficiency of thermal
power generation”, are included. Furthermore, the contribution to the SDGs (seebelow) is also taken into account. These are disclosed within the Framework and otherdocuments, and meet the disclosure elements CTF-2.

*1: An international standard providing ESG-related reporting, management, and analysis methods, established by
Global Reporting Initiatives

CTF-3. Climate Transition Strategy to be ‘Science-based’ Including Targets andPathway:
JERA's transition strategy is formulated in consistency with the transition roadmap forthe electricity sector of METI as described in CTF-1. The transition roadmap for theelectricity sector refers to the Sixth Strategic Energy Plan, which is in line with the Plans
for Global Warming Countermeasures. These are established based on Japanese
government's aim to achieve carbon neutrality in 2050 and to reduce greenhouse gas
emissions by 46% in 2030 compared to the FY2013 level in refer to IPCC 1.5°C Special
Report. These are consistent with the Paris Agreement.
In JERA's transition strategy, the medium- and long-term goals to reduce CO2 emissions
from company’s activities are indexed and quantified while the process of achieving
those goals is clarified. In addition, “JERA Environmental Target 2035” and “JERA Zero
CO2 Emissions 2050 Roadmap for its Business in Japan (updated in May 2022)”,
released in May 2022, provide additional disclosure of mid-term targets. These aredisclosed in JERA Group Corporate Communication Book 2021, the Framework, etc. or
this second party opinion, and meet the disclosure elements CTF-3.
CTF-4. Implementation Transparency:
DNV confirmed that the investments and project plans related to JERA's transition
strategy included investments and expenditures that have been implemented and arescheduled in the future. DNV also confirmed that the overall investment plan
(investment amount) will be executed in accordance with the timeline. DNV confirmedthat in order to ensure transparency, JERA will discuss on the disclosure, wherever
possible, of its basic investment plan (investment amount).DNV also reviewed the
Framework and the ESG management of JERA and confirmed high transparency in theimplementation. JERA explained the appropriateness of its execution to DNV and DNVagreed on the appropriateness. These meet the disclosure elements CTF-4.
<GBP Eligibility Assessment Results>
GBP-1. Use of Proceeds:
JERA defined the project categories of the use of proceeds as the projects (transition
projects) to realize zero CO2 emissions from thermal power generation. Specifically, thetwo eligibility criteria below refer to the transition projects ① to ⑥. The proceeds will beallocated to financing or refinancing R&D, business development, construction,
operation, refurbishment, demolition or/and other related expenditures. DNV has
confirmed that these transition projects are consistent with the elements CTF-1 to 4.
The transition projects have been evaluated by JERA as having clear and positiveenvironmental impacts in line with the transition strategy and are expected to contributedirectly and indirectly to the SDGs. These projects are aligned with GBP-1. The following
is an overview of the six projects to which the proceeds of the scheduled transition bondare to be allocated.

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Table I JERA Transition Finance Eligibility Criteria and Project Overview(Please see text for details)
Project categories

Eligibility Criteria

Project Overview (Main Expenditure)①

Demonstration study of 20% ammonia co-firing in 1
million kW class coal-fired power plant- Project period: June 2021 - March 2025
- Project description: Development and demonstration
test of technology to convert 20% of fuel (calorific value
ratio) to ammonia at Hekinan Thermal Power Station
Unit 4 (to FY2024)※ Adoption of New Energy and Industrial Technology
Development Organization (NEDO) subsidized project"Development of Technologies for Carbon Recycling and
Next-Generation Thermal Power Generation / Research,
Development and Demonstration of Technologies forAmmonia Co-Firing Thermal Power Generation"②

Demonstration study on actual equipment to establish
technology for high ammonia co-firing rate atcommercial thermal power plants- Project period: FY2021 to FY2028

Transition
Project
Projects for therealization ofzero CO2
emissionthermal power- Project description: Development of a new ammonia

The expenditures
related todemonstration
projects of fossil fuels
andammonia/hydrogenco-firinghigh-efficiency burner and study of the specifications of
the equipment (to FY 2024), and demonstration tests
to convert more than 50% of the fuel (calorific value
ratio) to ammonia at the Hekinan thermal power station(to FY2028).
※ Adoption of NEDO Green Innovation Fund Project"Establishment of Fuel Ammonia Supply Chain Project”③

Demonstration of high co-firing rate at thermal power
station using ammonia single-fuel burners- Project period: FY2021 to FY2028- Project description: Development of a new ammonia
single-fuel burner and study of the specifications of theequipment (to 2024), and conducting technology
development and demonstration tests to convert morethan 50% of the fuel (calorific value ratio) to ammonia
at two different boiler units (to FY2028).
※ Adoption of NEDO Green Innovation Fund Project"Establishment of Fuel Ammonia Supply Chain Project”④

Technical verification of hydrogen co-firing power
generation for the construction of a large-scalehydrogen supply chain- Project period: October 2021 to March 2026

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JERA Co., Inc. JERA Transition Bond Framework Second Party Opinion Rev1.0- Project description: Conducting demonstration tests
at large-scale LNG-fired power plants in Japan toconvert approximately 30% (by volume) of LNG intohydrogen for power generation (to FY2025).
※ Adoption of NEDO Green Innovation Fund project for“Construction of a large-scale hydrogen supply chain”
The expenditures
related todecommissions ofinefficient thermal
power plants, with theaim of replacement for
high-efficiency thermal
power plants⑤

Demolition of existing power generation facilities at Goi
Thermal Power Station (LNG)⑥

Demolition of existing power generation facilities at
Chita Thermal Power Station (LNG)(Demolition plan is in preparation)

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GBP-2. Process for Project Evaluation and Selection:

In addition to confirming that the transition projects meet the GBP-1 eligibility project
categories, JERA will also confirm that potential negative environmental/social impacts
are taken into account, and that the procedures of equipment certification, licensing andenvironmental assessment in the regions where the projects are to be implemented areappropriate. Specifically, eligible projects are selected by the Finance Group and finalized
by Executive Officer, Head of the Finance Group after comprehensive analyses andreviews of the financial risks, technical and operational risks, market environment and
ESG risks carried out by related business department. The process is consistent with
GBP-2.
GBP-3. Management of Proceeds:
JERA's Finance Group will manage the allocation of the net proceeds of Transition Bonds
on at least an annual basis, using the internal accounting management system until theproceeds have been fully allocated. The proceeds are managed in cash or cash
equivalents in an amount equal to the unallocated proceeds until the proceeds havebeen fully allocated.
GBP-4. Reporting:
JERA will report the allocation of the proceeds (allocated/unallocated amounts,
new/refinancing) of the Transition Bonds on JERA’s website annually until the proceeds
have been fully allocated to Eligible Projects. In addition, the outline of the projects been
allocated and their positive environmental impacts will be disclosed on the JERA's
website to the extent practicable (in terms of the positive environmental impacts,
outline and the progress of the eligible projects will be included). Moreover, JERA will
disclose timely or in its reports in the event of significant changes in transition strategy
or pathway, or significant changes in allocation plans or results.
Based on an assessment of the Framework, other relevant documents and information
provided by JERA, DNV has confirmed that the Framework meets the standards required by
the relevant handbooks, principles and guidelines, and thus is eligible as transition finance. It
was also confirmed that the scheduled transition bond is appropriately structured and will be
issued in accordance with the Framework.

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Table II Transition Bonds (to be issued in May 2022) Transition Project Overview
Eligibility Criteria

Project Overview (Main Expenditure)
Project Name: Demonstration study of 20% ammonia co-firing in 1 million
kW class coal-fired power plant
Project Overview: Development and demonstration test of technology toconvert 20% of fuel (calorific value ratio) to ammonia at Hekinan Thermal
Power Station Unit 4 (to FY2024).

①

Project Period: June 2021 - March 2025
Environmental Impacts: The overview and progress status of project will bereported.
Project Name: Demonstration study on actual equipment to establish
technology for high ammonia co-firing rate at commercial thermal power
plants
Project Overview: Development of a new ammonia high-efficiency burnerand study of the specifications of the equipment (to FY 2024), anddemonstration tests to convert more than 50% of the fuel (calorific value
ratio) to ammonia at the Hekinan thermal power station (to FY2028).

②
The expenditures
related todemonstration
projects of fossil
fuels andammonia/hydrogenco-firing③

Project Period: FY2021 to FY2028
Environmental Impacts: The overview and progress status of project will bereported.
Project Name: Demonstration of high co-firing rate at thermal power station
using ammonia single-fuel burners
Project Overview: Development of a new ammonia single-fuel burner andstudy of the specifications of the equipment (to 2024), and conducting
technology development and demonstration tests to convert more than 50%of the fuel (calorific value ratio) to ammonia at two different boiler units (toFY2028).
Environmental Impacts: The overview and progress status of project will bereported.
Project Name: Technical verification of hydrogen co-firing power
generation for the construction of a large-scale hydrogen supply chain
Project Overview: Conducting demonstration tests at large-scale LNG-fired
power plants in Japan to convert approximately 30% (by volume) of LNG intohydrogen for power generation (to FY2025).

④

Project Period: October 2021 to March 2026
Environmental Impacts: The overview and progress status of project will bereported.

⑤

The expenditures
related todecommissions ofinefficient thermal
power plants, withthe aim ofreplacement for

Project Name: Demolition of Goi Thermal Power Station
Project Overview: Demolition of existing power generation facilities at Goi
Thermal Power Station (LNG)
Completion of Demolition work: September 2023
Environmental Impacts: The overview and progress status of project will bereported.

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high-efficiency
thermal power
plants⑥

Project Name: Demolition of Chita Thermal Power Station
Project Overview: Demolition of existing power generation facilities at Chita
Thermal Power Station (LNG)(Demolition plan is in preparation)
Completion of Demolition work: TBD
Environmental Impacts: The overview and progress status of project will bereported.

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Contents
I. Introduction

11

II. Scope and Objectives

26

III. Responsibilities of JERA and DNV

27

IV. Basis of DNV’s Opinion

27

V. Work Undertaken

29

VI. Findings and DNV’s Opinion

30

VII. Assessment Conclusion

44

Schedule-1 JERA Transition Bond Nominated Eligible Projects

46

Schedule-2 Climate Transition Bond Eligibility Assessment Protocol

48

Schedule-3 Green Bond (Transition Finance with specific use of proceeds) Eligibility Assessment
Protocol57

Schedule-4: Basic Guidelines on Climate Transition Finance Eligibility Checklist

67

Schedule-5 Green Bond Guidelines (Transition Finance with specific use of proceeds) Eligibility
Assessment

105

List of Reference Materials

121

Revision history
Revision
number0

Date of issue
14/2/2022

Remarks
InitialUpdate descriptions related to "Process for Project Evaluation and
Selection" and "Management of Proceeds" due to JERA's businessexecution system changes in April 2022.

1

12/5/2022

Addition of eligibility assessment for additional target disclosures related
to transition strategies due to the establishment of the "JERA
Environmental Target 2035" and the update of the “JERA Zero CO2Emissions 2050 Roadmap for its Business in Japan” in May 2022.

Disclaimer
Our assessment relies on the premise that the data and information provided by Issuer to us as part of our review procedures have been provided in good faith.
Because of the selected nature (sampling) and other inherent limitation of both procedures and systems of internal control, there remains the unavoidable risk thaterrors or irregularities, possibly significant, may not have been detected. Limited depth of evidence gathering including inquiry and analytical procedures and limited
sampling at lower levels in the organization were applied as per scope of work. DNV expressly disclaims any liability or co-responsibility for any decision a person or anentity may make based on this Statement.

Statement of Competence and Independence
DNV applies its own management standards and compliance policies for quality control, in accordance with ISO/IEC 17021:2011 - Conformity Assessment Requirements
for bodies providing audit and certification of management systems, and accordingly maintains a comprehensive system of quality control, including documented
policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. We have compliedwith the DNV Code of Conduct1 during the assessment and maintain independence where required by relevant ethical requirements. This engagement work was carriedout by an independent team of sustainability assurance professionals. DNV was not involved in the preparation of statements or data included in the Framework except
for this Statement. DNV maintains complete impartiality toward stakeholders interviewed during the assessment process.

1 DNV Code of Conduct is available from DNV website (www.DNV.com)

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I. Introductioni.

About the Issuer
JERA Co., Inc. (hereinafter, JERA, including JERA Group) was established in April 2015
as the company to realize the comprehensive alliance, related to the continuous value
chain from fuel upstream and procurement business to power generation and electricity
and gas sales, between Tokyo Electric Power Company (at the time of foundation of
JERA) and Chubu Electric Power Company. JERA established a unified, continuous value
chain from fuel upstream and procurement business to power generation and electricity
and wholesaling, earning its status as an energy company with power generation
capacity equivalent to half of Japan’s thermal power generation output and a fueltransaction volume among the world’s highest. JERA engages in borderlessmanagement of all businesses from fuel procurement to power generation and sales inthree profit centers, which are “Business development,” “Optimization,” and “O&M･
Engineering,” to establish a system capable of pursuing expertise and excellence andmaximizing synergy in each business.

Business Development: Domestic Power Generation Business, Overseas Power
Generation and value chain Business, Renewable Energy
development Business, Fuel upstream, transportation, andlong-term LNG procurement Businesses
O p t i m i z a t i o n : Short-Term Fuel Procurement Business, Fuel Trading
Business, Electricity and Gas Sales Business
O&M & Engineering: O&M Engineering technology, Rendering O&M engineering
services to third parties

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ii.

Issuer's Initiatives for ESG/SDGs
JERA sets "To provide cutting edge solutions to the world's energy issues" as its
mission, and believes that it is important to fully understand and manage the impactof the external environment on JERA and the effects of its business activities on thesociety and the environment. JERA tackles to sophisticate the ESG initiatives together
with all value chain.
In order to simultaneously provide the solution for social issues and increase its
corporate value over medium-to-long-term, JERA identified the material issues(materiality) shown in Table-1 and aims to contribute to the achievement of the
Sustainable Development Goals (SDGs) set by the United Nations by promoting
sustainable activities that are integrated with its business activities.
Among all the material issues (materiality), the issue mainly relevant to the transition
finance is "to tackle the climate change"(See Table-1 "I Environment"), as outlined in
JERA's vision, "Global leader in LNG and renewables, sparking the transition to aclean energy economy” *, and the relationship with the SDGs is summarised asfollows:
Table-1 JERA's Mission, Vision, Material Issues (Materiality) and Relevant SDGs
MissionTo provide cutting edge solutions to the world's energy issues
VisionGlobal leader in LNG and renewables, sparking the transition to a clean energy economy*
Categories of material
issuesMateriality
Decarbonization / expansion ofrenewable energy

I

Environment

Compliance with environmental
legislation
Improved efficiency of thermal power
Generation
Respect for diversity
Securing and developing global,
strategic human resources

II

Human Resources

Securing and developing skilled workers
Management of employee health andworkplace safety and sanitation
Promoting of work-life balance
Energy supply in pursuit of customer

III

Societysatisfaction
Application of digital technology

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Relevant SDGs

JERA Co., Inc. JERA Transition Bond Framework Second Party Opinion Rev1.0

Leveraging our technology to makecontributions in various fields
Communication with local communities
Improvement of energy infrastructure indeveloping countries
IV

Human Rights

Consideration of the human rights oflocal community members
Enhancement of corporate governanceRisk identification, management, andresponse
Strengthening of earning power
Stable supply of electricity
Safety of facilities (process safety,

V

Governancedisaster prevention and response
measures)Response to large-scale disasters andpandemics
Rigorous compliance
Bilateral communication withstakeholders*In May 2022, JERA’s vision was changed to “To scale up its clean energy platform of renewables and low greenhouse gas
thermal power, sparking sustainable development in Asia and around the world”

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iii. Issuer's Environmental Initiatives
Bearing in mind the promotion of decarbonization at low cost and high speed while
keeping a stable energy supply, JERA formulated “JERA Zero CO2 Emissions 2050”
in October 2020, to achieve zero CO2 emissions by 2050. It states that JERA willtake on the challenge of achieving, by 2050, virtually zero CO2 emissions from
JERA’s operations in Japan and overseas by taking the three approaches as follows:
1. Complementarity between Renewable Energy and Zero CO2 Emission Thermal
Power Generation, 2. Establishment of Roadmaps Suitable for Each Country andRegion and 3. Adoption of “Smart Transitions”.
In addition, JERA established “JERA Zero CO2 Emissions 2050 Roadmap for its
Business in Japan” that shows a pathway toward CO2 zero mission by 2050 for its
business in Japan. To promote CO2 zero emissions in domestic operations inaccordance with this road map into practice, JERA has formulated “JERA
Environmental Target 2030 for its Business in Japan” as its new environmental
goals as of FY2030. JERA committed to the achievement of the following goals:① Shut down/decommission all inefficient (supercritical or less) coal-fired thermal
power plants and promote demonstration experiments of mixed combustion
with ammonia at high-efficiency (ultra-supercritical) coal-fired thermal power
plants.
② Promote the development of renewable energy centered on offshore wind
power generation projects and work to further improve the efficiency of LNG
thermal power generation.
③ Reduce CO2 emission intensity by 20% compared to that of thermal power
plants in Japan as a whole, based on the long-term energy supply and demand
outlook for FY2030 set by the government. (Table-2/Figure-1 and 2)
In May 2022, JERA established the "JERA Environmental Target 2035" to accelerate
further its efforts to achieve the realization of CO2 zero emissions and clarified andannounced its goal to reduce CO2 emissions from domestic operations by at least
60% (relative to FY 2013) by FY 2035 and to improve the ammonia co-firing rate.
(Figure-2)

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Figure-1: JERA's approach towards zero CO2 Emissions by 2050 (Decarbonization strategy)

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Table-2: Approaches of JERA Zero CO2 Emissions 2050 (Decarbonization strategy)
Initiatives

Goal
2050
Zero CO2 emissions
2035

JERA will take on the challenge of achieving CO2
zero emissions from JERA’s operations in Japan andoverseas by 2050 through the achievement of its
mission, “To provide cutting-edge solutions to theworld's energy issues”.
 Complementarity between Renewable Energy
and Zero CO2 Emission Thermal Power
Generation
 Establishment of Roadmaps Suitable for EachCountry and Region
 Adoption of “Smart Transition”
Promotion of zero CO2 Emission Thermal Powerand Renewable energy
 Shut down all inefficient (supercritical or less)coal power plants
 Demonstration tests of mixed combustion withammonia Implementation of mixed combustion with
Hydrogen Promoting offshore wind power①②③

Reduce CO2 emissions from domestic
operations by at least 60% (relative to FY2013).
Given the expanded adoption of renewableenergy based on the national government’s
2050 carbon neutral policy, JERA will strive todevelop and adopt renewable energy in Japan.
Work to reduce carbon emission intensity fromthermal power generation by promotinghydrogen and ammonia co-firing.
2030①

Shut down/decommission all inefficient(supercritical or less) coal-fired thermal power
plants and promote demonstration
experiments of mixed combustion withammonia at high-efficiency (ultra-supercritical)
coal-fired thermal power plants.
② Promote the development of renewableenergy centered on offshore wind power
generation projects and work to further
improve the efficiency of LNG thermal power
generation.
③ Reduce CO2 emission intensity by 20%
compared to that of thermal power plants inJapan as a whole, based on the long-term
energy supply and demand outlook for FY2030
set by the government.

For the realization of CO2 zero emissions, the “JERA Zero CO2 Emissions 2050 Roadmap for its
Business in Japan” (Figure 2) states that JERA will promote various research and development,
demonstration, introduction of technologies and facilities while promoting CO2 emissions
reduction by utilizing decarbonization technologies in the medium term.
In May 2022, JERA added a target to accelerate further its efforts to achieve the realizationof CO2 zero emissions, aiming to reduce CO2 emissions from domestic operations by at least
60% (relative to FY2013) by FY 2035 with the establishment of the "JERA Environmental
Target 2035" and the update of the “JERA Zero CO2 Emissions 2050 Roadmap for its
Business in Japan”. Furthermore, JERA have developed a more ambitious transition strategy
including clarifying the timing of full-scale operation at 20% and 50% ammonia co-firing
rates in coal-fired thermal power generation, which is consistent with the transition roadmap
for the electricity sector of METI.

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Figure-2: “JERA Zero CO2 Emissions 2050 Roadmap for its Business in Japan (Updated May 2022)”

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Table-3: JERA's non-consolidated greenhouse gas emissions in Japan (FY2020 results)
GHG Emissions

Scope(CO2 equivalent)

Scope1

114,950,000 t-CO2

Scope 24,000 t-CO2

Scope3

20,680,000 t-CO2
Total

135,640,000 t-CO2

Scope 1: Direct emissions of greenhouse gases by the company itself(combustion of fuels, industrial processes)
Scope 2: Indirect emissions from the use of electricity, heat and steam
supplied by other companies
Scope 3: Indirect emissions other than Scope 1 and 2 (emissions fromother companies related to the company’s’ activities)＊Data includes emissions of Hitachinaka Generation Co. Inc.
＊Scope 2 and 3 cover CO2 only. Scope 1 covers CO2, CH4 (methane), N2O(nitrous oxide), SF6 (sulphur hexafluoride) and HFC (alternative freon).

Table-4: JERA's participation in External Initiatives and Endorsements
External Initiatives
Sustainable Development
Goals (SDGs)

JERA's Initiatives
Contribute to the achievement of the SDGs bypromoting business activities aimed at realising its
vision, “To scale up its clean energy platform of
renewables and low greenhouse gas thermal power,
sparking sustainable development in Asia and aroundthe world” (see Table-1).

Task Force on Climaterelated Financial
Disclosures (TCFD)JERA endorses the TCFD recommendations and will
use scenario analysis for identifying climate changerelated business opportunities and risks. JERA is alsoa member of the TCFD Consortium, which is
discussing how to disclose information on climatechange responses in line with the TCFD
recommendations.

Ocean Renewable Energy
Action Coalition

Discussing the initiatives required to governments
and industries to ensure the sustainable expansion of
offshore wind power towards 2050.

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JERA Co., Inc. JERA Transition Bond Framework Second Party Opinion Rev1.0

iv. About the JERA Transition Bond Framework
In order to advance the initiatives toward CO2 zero emissions set forth in “JERA Zero
CO2 Emissions 2050”, and in order to raise funds for transition activities contributing torealize the transition roadmap for the electricity sector of METI through transition
finance, JERA formulated the JERA Transition Bond Framework (hereinafter,“Framework”). The criteria which this Framework specifically referred to is described in(3) of Section II below.
v.

Issuer’s Transition Strategy for Decarbonization(1) Strategies by Sector (Industry) at the International/National/Regional Level
Figure-3 shows the transition roadmap for the electricity sector of METI.
The transition roadmap for the electricity sector of METI (see figure-3) and JERA's
Roadmap (see figure-2) are well aligned in terms of decarbonizing power sources andincreasing the efficiency of thermal power generation as a transition power source bydeveloping and introducing the latest technologies. The transition roadmap for theelectricity sector refers to the Sixth Strategic Energy Plan, which is in line with the Plans
for Global Warming Countermeasures. These are established based on Japanese
government's aim to achieve carbon neutrality in 2050 and to reduce greenhouse gas
emissions by 46% in 2030 compared to the FY2013 level in refer to IPCC 1.5°C Special
Report. These are consistent with the Paris Agreement.
JERA will shut down all inefficient coal-fired power plants by 2030, and promote thedemonstration of mixed combustion with ammonia at high-efficiency (ultra-supercritical)
coal-fired thermal power plants. In addition, JERA will replace the existing inefficient
LNG thermal power stations with high-efficiency stations, and carry out thedemonstration of mixed combustion with hydrogen. Through these approaches, JERA
will achieve reducing carbon emission intensity from thermal power plants by 20%
based on the long-term energy supply-demand outlook for FY 2030 as set by thegovernment. JERA also aim to reduce CO2 emissions from domestic operations by atleast 60% (relative to FY 2013) by FY 2035. Thus, it is considered that JERA's policy of
shutting down the inefficient coal power plants indicated in its roadmap, and its
reduction target of CO2 emission intensity by 2030 and CO2 emission reduction target
for 2035 are closely related to the pathway outlined in the transition roadmap for theelectricity sector of METI (Figure-3).

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Figure-3: "Transition Roadmap for Electricity Sector", February 2022, Ministry of Economy,
Trade and Industry (Provisional translation by DNV based on the Japanese version)

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JERA Co., Inc. JERA Transition Bond Framework Second Party Opinion Rev1.0(2) Issuer's Transition Strategies
JERA has positioned its efforts to achieve its medium- and long-term goals, that aim atrealizing CO2 zero emission by 2050 set out in “JERA Zero CO2 Emissions 2050” and “JERA
Zero CO2 Emissions 2050 Roadmap for its Business in Japan”, as its transition strategy.
These are consistent with the Transition Roadmap for the electricity sector.
Given the fact that indirect emissions from power generation accounts for 38% of the CO2
emissions per final energy consumption in Japan where JERA operates, the transition
strategy of JERA, whose major emissions come from its thermal power generation, will not
only contribute to reducing emissions from its own business activities (Scope 1 and 2), butalso contribute to achieving the decarbonization goals of diverse entities.
Table-5 below shows JERA's goal by 2050 and the mid-term goals, “JERA Environmental
Target 2030” and “JERA Environmental Target 2035”. In addition, Figure-2 below (reposted) shows the overview of JERA's transition strategy, specific initiatives and timelines.
The main initiatives for achieving carbon neutrality are shown in Table-5 below.
Table-5: JERA Transition Goals
 REDUCE CARBON EMISSION INTENSITY OF THERMAL POWER
PLANTS BY 20% BASED ON THE LONG-TERM ENERGY SUPPLYDEMAND OUTLOOK FOR FY 2030 AS SET BY THE GOVERNMENT.
 SHUT DOWN ALL INEFFICIENT (SUPERCRITICAL OR LESS) COALJERAENVIRONMENTALTARGET 2030

POWER PLANTS
 PROMOTE DEMONSTRATION OF MIXED COMBUSTION WITHAMMONIA AT HIGH-EFFICIENCY (ULTRA-SUPERCRITICAL)
POWER PLANTS
 PROMOTE THE DEVELOPMENT OF RENEWABLE ENERGY CENTEREDMEDIUM-ON OFFSHORE WIND POWER PROJECTSTERM WORK TO FURTHER IMPROVE THE EFFICIENCY OF LNG THERMAL

GOALSPOWER GENERATION REDUCE CO2 EMISSIONS FROM DOMESTIC OPERATIONS BY AT
LEAST 60% (RELATIVE TO FY 2013) BY FY 2035.
 GIVEN THE EXPANDED ADOPTION OF RENEWABLE ENERGYJERAENVIRONMENTALTARGET 2035

BASED ON THE NATIONAL GOVERNMENT’S 2050 CARBON
NEUTRAL POLICY, JERA WILL STRIVE TO DEVELOP AND ADOPTRENEWABLE ENERGY IN JAPAN JERA WILL WORK TO REDUCE CARBON EMISSION INTENSITYFROM THERMAL POWER GENERATION BY PROMOTINGHYDROGEN AND AMMONIA CO-FIRINGLONGTERM
GOALS

2050

 CO2 ZERO EMISSIONS*JERA's roadmap will be refined in stages based on policy and other assumptions. The roadmap will also be revised if theassumptions change significantly.

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Figure-2 (Re-posted): “JERA Zero CO2 Emissions 2050 Roadmap for its Business in Japan(Updated in May 2022)”
Figure-4 shows a timeline for the commercial operation of ammonia and hydrogen co-firing
rates in thermal power generation. Table-6 shows the major efforts to achieve carbon
neutrality.

Figure-4: Specific Initiatives for Decarbonization

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Table-6: JERA's Main Initiatives to Achieve Carbon Neutrality(Transition Finance and Nominated Projects)
Project categories

Eligibility Criteria

Project Overview (Main Expenditure)①

Demonstration study of 20% ammonia co-firing in 1 million
kW class coal-fired power plant- Project period: June 2021 - March 2025
- Project description: Development and demonstration test oftechnology to convert 20% of fuel (calorific value ratio) toammonia at Hekinan Thermal Power Station Unit 4 (toFY2024)※ Adoption of New Energy and Industrial Technology
Development Organization (NEDO) subsidized project"Development of Technologies for Carbon Recycling and NextGeneration Thermal Power Generation / Research,
Development and Demonstration of Technologies for Ammonia
Co-Firing Thermal Power Generation"②

Demonstration study on actual equipment to establish
technology for high ammonia co-firing rate at commercial
thermal power plants- Project period: FY2021 to FY2028- Project description: Development of a new ammonia high-Transition Project
Projects for therealization of zeroCO2 emission
thermal power

The expenditures
related todemonstration
projects of fossil fuels
andammonia/hydrogenco-firing

efficiency burner and study of the specifications of theequipment (to FY 2024), and demonstration tests to convert
more than 50% of the fuel (calorific value ratio) to ammonia at
the Hekinan thermal power station (to FY2028).
※ Adoption of NEDO Green Innovation Fund Project"Establishment of Fuel Ammonia Supply Chain Project”③

Demonstration of high co-firing rate at thermal power station
using ammonia single-fuel burners- Project period: FY2021 to FY2028- Project description: Development of a new ammonia singlefuel burner and study of the specifications of the equipment(to 2024), and conducting technology development anddemonstration tests to convert more than 50% of the fuel(calorific value ratio) to ammonia at two different boiler units(to FY2028).
※ Adoption of NEDO Green Innovation Fund Project"Establishment of Fuel Ammonia Supply Chain Project”④

Technical verification of hydrogen co-firing power generation
for the construction of a large-scale hydrogen supply chain- Project period: October 2021 to March 2026
- Project description: Conducting demonstration tests at largescale LNG-fired power plants in Japan to convert
approximately 30% (by volume) of LNG into hydrogen for
power generation (to FY2025).

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JERA Co., Inc. JERA Transition Bond Framework Second Party Opinion Rev1.0※ Adoption of NEDO Green Innovation Fund project for“Construction of a large-scale hydrogen supply chain”

The expenditures
related todecommissions ofinefficient thermal
power plants, with theaim of replacement for
high-efficiency thermal
power plants⑤

Demolition of existing power generation facilities at Goi⑥

Demolition of existing power generation facilities at Chita

Thermal Power Station (LNG)

Thermal Power Station (LNG)(Demolition plan is in preparation)

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JERA Co., Inc. JERA Transition Bond Framework Second Party Opinion Rev1.0(3) Governance of the Issuer (Sustainability Promotion System)JERA considers all matters related to transition finance as matters related to its
management strategy and implements the following corporate governance system. In
order to expand business throughout the world in a wide range of fields, the Board of
Directors consisting of directors from JERA who are familiar with JERA’s business, andoutside directors who have extensive knowledge and experience shall make material
business decisions and supervise business executions. Further, JERA has corporate
auditors as independent officers (the “Corporate Auditors”) who shall be responsible for
auditing the execution of the Directors’ duties. In addition, in order to separate thedecision-making and supervision of management from the execution of business and toeffectuate accurate and prompt decision-making and efficient business execution, JERA
has adopted an executive officer system where executive officers are responsible forbusiness execution based on the decisions made by the Board.

Groups and Branches

Figure-5 Corporate Governance System (Changed in April 2022)

Name of issuer: JERA Co., Inc.
Name of Framework: JERA Transition Bond Framework
Name of external reviewer: DNV Business Assurance Japan K.K.
Date of report: 12th May 2022

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II. Scope and Objectives
DNV has been commissioned by JERA to provide a pre-issuance assessment on JERATransition Bond Framework (hereinafter, “Framework”) and the Transition Bonds. Our
objective was to implement an assessment on whether the JERA's Framework andTransition Bonds meet the criteria established on CTFH・CTFBG and GBP・GBGLs and provide
a second party opinion on the eligibility of the Framework and the Transition Bonds to beissued.
DNV, as an independent external reviewer, has identified no real or perceived conflict ofinterest associated with the delivery of this second-party opinion for JERA.
In this report, no assurance is provided regarding the financial performance of the BOND,
the value of any investments in the BOND, or the long-term environmental impacts of thetransaction.
(1) Scope of Review*
The review assessed the following elements and confirmed their alignment with the gist of GBP:☒.

Use of Proceeds☒.

Process for Project Evaluation and Selection☒.

Management of Proceeds☒.

Reporting*The scope of review is to be applied as a part of the evaluation of the transition finance with use of proceeds*The four disclosure elements of CTFH and CTFBG are included in the scope of review(2) Role(s) of Review Provider☒

Consultancy (incl. 2nd opinion)☐

Certification☐

Verification☐

Rating☐Other (please specify):(3) Standards/Guidelines to be Applied
No.

Standards/guidelines

Scheme owner

1.

Climate Transition Finance Handbook (CTFH)*1

International Capital Market Association(ICMA), 2020

2.

Basic Guidelines on Climate Transition Finance (CTFBG) *1

Financial Services Agency, Ministry of
Economy, Trade and Industry, Ministry of
the Environment, 2021

3.

Green Bond Principles (GBP) *2

International Capital Market Association(ICMA), 2021

4.

Green Bond Guidelines (GBGLs) *2

Ministry of the Environment, 2020

*1
*2

Climate transition: The concept of climate transition focuses principally on the credibility of an issuer’s climate changerelated commitments and practices. (Quoted from CTFH and CTFBG)
It confirms compliance with the four core elements (use of proceeds, process for project evaluation and selection,
management of proceeds, and reporting) that must be met when implementing as a bond that meets the four elementsof transition and has a specific use of proceeds (quoted from CTFBG).

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III. Responsibilities of JERA and DNVJERA has provided the information and data used by DNV during the delivery of this review.
DNV’s second party opinion represents an independent opinion and is intended to inform JERA
and other interested stakeholders of JERA’s Transition Finance whether the established criteria
have been met, based on the information provided to us. In our work we have relied on theinformation and the facts presented to us by JERA. DNV is not responsible for any aspect of thenominated projects and assets referred to in this opinion and cannot be held liable if estimates,
findings, opinions, or conclusions are incorrect. Thus, DNV shall not be held liable if any of theinformation or data provided by JERA’s management and used as a basis for this assessment
were not correct or completed.

IV. Basis of DNV’s Opinion
To provide as much flexibility for the issuer, JERA as possible, we have adapted our JERA Transition
Finance assessment methodologies, which incorporates the requirements of the CTFH, CTFBG and
GBP, GBGLs, to create a JERA Transition Finance Eligibility Assessment Protocol (hereinafter,“Protocol”). Please refer to Schedule-2 and Schedule-3.
DNV, as an independent external reviewer, provides second party opinion according to theprotocol.
Our Protocol includes a set of suitable criteria that can be used to underpin DNV’s opinion. The
overarching principle behind the Climate Transition Finance of Bond with a specific use ofproceeds as the basis for the opinion are as follows:“provide an investment opportunity with transparent sustainability credentials”“enable capital-raising and investment for new and existing projects with environmental
impacts"

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As per our Protocol, the criteria against which the JERA Transition Finance has been reviewed
are grouped into common elements below, represented by CTFH, CTFBG and GBP, GBGLs.
(1) Four Elements of CTFH/CTFBG (disclosure elements)
•
•

•
•

Principle One: Issuer’s Climate Transition Strategy and Governance
The financing purpose should be for enabling the issuer’s climate change strategy.
Principle Two: Business Model Environmental Materiality
The planned climate transition trajectory should be relevant to theenvironmentally-material parts of the issuer’s business model.
Principle Three: Transition is Science-based including Targets and Pathway
Issuer’s climate strategy should reference science-based targets and transition pathways.
Principle Four: Implementation Transparency
Market communication in connection with the offer of a financing instrument which has
the aim of funding the issuer’s climate transition strategy should also provide
transparency of the underlying investment program.
(2) Four elements of GBP/GBGLs•

Principle One: Use of Proceeds
The Use of Proceeds criteria are guided by the requirement that the issuer of a green
bond must use the funds raised to bond eligible activities. The eligible activities should
produce clear environmental benefits.

•

Principle Two: Process for Project Evaluation and Selection
The Project Evaluation and Selection criteria are guided by the requirements that theissuer of a green bond should outline the process it follows when determining eligibilityof an investment using green bond proceeds, and outline any impacts objectives it willconsider.

•Principle Three: Management of Proceeds
The Management of Proceeds criteria are guided by the requirements that a green
bond should be tracked within the issuing organization, that separate portfolios shouldbe created when necessary and that a declaration of how unallocated funds will behandled should be made.

•Principle Four: Reporting
The Reporting criteria are guided by the recommendation that at least Sustainability
Reporting to the bond investors should be made of the use of bond proceeds and thatquantitative and/or qualitative performance indicators should be used, where feasible.

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V. Work Undertaken
Our work constituted a comprehensive review of the available information, based on theunderstanding that this information was provided to us by the issuer in good faith. We havenot performed an audit or other tests to check the veracity of the information provided to us.
The work undertaken to form our opinion included:i. Pre-funding Assessment (Transition Bonds Framework and Transition Bonds)•

Creation of a JERA-specific Protocol, adapted to the purpose of the JERA Transition
Finance, as described above and in Schedule-2 to this assessment.

•

Assessment of documentary evidence provided by JERA on the JERA Transition
Finance and supplemented assessment by a comprehensive desktop research. Thesechecks refer to current assessment best practice and standards methodologies;•

Discussions with JERA, and review of relevant documentation;•

Documentation of findings against each element of the criteria.

ii. Post-funding Assessment (*not included in this report)•

Interview with JERA management, and review of the relevant documentation;•

Field research and inspection (if necessary)•

Document creation of post-issuance assessment results

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VI. Findings and DNV’s Opinion
DNV’s findings and opinion are as described in (1) and (2) below.
CTF-1 to 4 in (1) below are the findings and opinions of DNV against the disclosure elementsof CTFH and CTFBG.
Please see Schedule-2 for details.
GBP-1 to 4 in (2) below are the findings and opinions of DNV against the requirement of thefour common elements of GBP/GBGLs.
Please see Schedule-3 for details.
(1) Findings and Opinions of DNV against the Four Common Elements (Disclosure
Elements) of CTFH and CTFBG
CTF-1.

Issuer’s Climate Transition Strategy and Governance-

JERA released "JERA Zero CO2 Emissions 2050", the goal of achieving zero CO2emissions by 2050, and “JERA Zero CO2 Emissions 2050 Roadmap for its
Business in Japan” in October 2020. JERA has set a long-term goal of CO2 zero
emission by 2050, which is consistent with the goal of the Paris Agreement,
and also has set the medium-term goals “JERA Environmental Target 2030” toachieve its long-term goal. JERA disclosed its strategic plan to achieve the goalof transitioning to carbon neutrality in its roadmap.

-

In May 2022, JERA added a target to accelerate further its efforts to achieve
the realization of CO2 zero emissions, aiming to reduce CO2 emissions fromdomestic operations by at least 60% (relative to FY 2013) by FY 2035 with theestablishment of the "JERA Environmental Target 2035" and the update of the"JERA Zero CO2 Emissions 2050 Roadmap for its Business in Japan".
Furthermore, JERA has developed a more ambitious transition strategy,
including clarifying the timing of full-scale operation at 20% and 50%
ammonia co-firing rates in thermal power generation, consistent with thetransition roadmap for the electricity sector of METI.

-

Based on the science-based long-term targets quantified by JERA, DNV has
reviewed and confirmed that JERA's targets correspond to achieving the goalsof the Paris Agreement. JERA sets corporate environmental strategies that areimportant to its business model based on the identification of risks andopportunities and scenario analysis referred to TCFD guidance.

-

Specifically, JERA's Transition Strategy is consistent with the transition
roadmap for the electricity sector of METI and is incorporated with its activity
plan which referred to the TCFD guidance. In addition, in order to achieve
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a timely and appropriate manner, considering the development status of thecorresponding technology and the timeline.
-

JERA recognizes that response to climate change, including theimplementation of Transition Strategy, is one of the most significant issues of
its business, and has established system and Framework to promote theinitiatives specified in “JERA Zero CO2 Emissions 2050”” and “JERA Zero CO2Emissions 2050 Roadmap for its Business in Japan” at the management level.

-

As a global company that provide energy solutions not only in Japan, but also
around the world, JERA considers global warming countermeasures as its
highest-priority management issue. Given that there are many countries in theworld experiencing such remarkable growth that the supply of power is unable
to keep up while there are also many areas that remain non-electrified and are
in need of power generation facilities, JERA's mission is not only to provide
optimal, environmentally conscious power solutions to these countries andregions, but also to create jobs via the power facility construction process aswell as to cultivate human resources through the provision of technology andexpertise. In turn, these will serve as springboards for further growth anddevelopment of industries, communities, and societies. Through these
activities, JERA aims to broadly contribute to achieving the Sustainable
Development Goals (SDGs) set by the United Nations. Among the materiality
issues identified in the JERA Group Corporate Communication Book 2021
(Integrated Report)", transition finance mainly relates to "Expansion of
decarbonization/Renewable energy" and "Improvement of thermal efficiency ofthermal power generation".

-

DNV has confirmed that the implementation plan provided by JERA, which isestablished based on the Framework, “JERA Zero CO2 Emissions 2050” and“JERA Zero CO2 Emissions 2050 Roadmap for its Business in Japan”, is wellaligned with JERA's Transition Strategy. Through the assessment, DNV has
also confirmed that the implementation plan established based on its
Transition Strategy is reliable, ambitious and achievable.

CTF-2.
-

Business Model Environmental Materiality
Given the fact that indirect emissions from power generation accounts for 38%
of the CO2 emissions per final energy consumption in Japan where JERA
operates, the transition strategy of JERA, whose major emissions come fromits thermal power generation, will not only contribute to reducing emissions
from its own business activities (Scope 1 and 2), but also contribute toachieving the decarbonization goals of diverse entities. In other words, JERA's
approach towards transition aiming to achieve decarbonization at a lower costand higher speed while maintaining stable energy supply, will directly support
its own transition as well as the transition of society as a whole.

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JERA Co., Inc. JERA Transition Bond Framework Second Party Opinion Rev1.0-

JERA's roadmap is aligned with the transition roadmap for the electricity sectorof METI.

-

DNV confirmed that JERA's plan to implement its Transition Strategy is one of
the activities of JERA's core business and is closely linked to the activities that
contribute to the CO₂ reduction of the society as a whole, thus will contributeto the overall environment. JERA's Transition Strategy is associated with themateriality that JERA has identified by facilitating GRI standards*1, ISO26000,
SASB standards*2, etc., and will contribute to generate significant positiveenvironmental impacts both qualitatively and quantitatively.
*1: An international standard providing ESG-related reporting, management and analysis methods
established by Global Reporting Initiative*2: A disclosure standard on ESG factors that are expected to have a high financial impact in the
future developed by the Sustainable Accounting Standards Board

CTF-3.

Climate Transition to be Science-based including Targets and Pathways-

JERA has set a transition plan consistent with the Paris Agreement, which isscience-based, and a transition trajectory consistent with the transition
roadmap for the electricity sector of METI. The transition roadmap for theelectricity sector refers to the Sixth Strategic Energy Plan, which is in line with
the Plans for Global Warming Countermeasures. These are established basedon Japanese government's aim to achieve carbon neutrality in 2050 and to
reduce greenhouse gas emissions by 46% in 2030 compared to the FY2013
level referring to IPCC 1.5°C Special Report. These plans are consistent with
the Paris Agreement.
DNV has confirmed that JERA's Transition Strategy quantified emission
intensity, absolute value and ratio based on a consistent methodology withprescribed assumptions. Specifically, JERA sets out the following transition
targets in its roadmap.
Table-5 (Re-posted) JERA Transition Goals
 REDUCE CARBON EMISSION INTENSITY OF THERMAL POWER
PLANTS BY 20% BASED ON THE LONG-TERM ENERGY SUPPLYDEMAND OUTLOOK FOR FY 2030 AS SET BY THE GOVERNMENT.
 SHUT DOWN ALL INEFFICIENT (SUPERCRITICAL OR LESS) COAL

MEDIUMTERM
GOALS

JERA
ENVIRONMENTALTARGET 2030

POWER PLANTS
 PROMOTE DEMONSTRATION OF MIXED COMBUSTION WITHAMMONIA AT HIGH-EFFICIENCY (ULTRA-SUPERCRITICAL)
POWER PLANTS
 PROMOTE THE DEVELOPMENT OF RENEWABLE ENERGY CENTEREDON OFFSHORE WIND POWER PROJECTS WORK TO FURTHER IMPROVE THE EFFICIENCY OF LNG THERMAL
POWER GENERATION

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 REDUCE CO2 EMISSIONS FROM DOMESTIC OPERATIONS BY AT
LEAST 60% (RELATIVE TO FY 2013) BY FY 2035.
 GIVEN THE EXPANDED ADOPTION OF RENEWABLE ENERGYJERAENVIRONMENTALTARGET 2035

BASED ON THE NATIONAL GOVERNMENT’S 2050 CARBON
NEUTRAL POLICY, JERA WILL STRIVE TO DEVELOP AND ADOPTRENEWABLE ENERGY IN JAPAN JERA WILL WORK TO REDUCE CARBON EMISSION INTENSITYFROM THERMAL POWER GENERATION BY PROMOTINGHYDROGEN AND AMMONIA CO-FIRINGLONGTERM
GOALS

2050

 CO2 ZERO EMISSIONSJERA's roadmap will be refined in stages based on policies and other assumptions. The roadmap will also be revised if theassumptions change significantly.

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CTF-4.

Implementation Transparency-

DNV confirmed that the investment and project plans related to JERA's
transition strategy included investments and expenditures that has been
implemented and are scheduled in the future. DNV also confirmed that theoverall investment plan (investment amount) will be executed in accordancewith the timeline. DNV confirmed that in order to ensure transparency, JERA
will discuss on the disclosure, wherever possible, of its basic investment plan
(investment amount).

-

DNV also reviewed the Framework and the ESG management of JERA andconfirmed high transparency in the implementation. JERA explained theappropriateness of its execution to DNV and DNV agreed on theappropriateness.

(2) Findings and Opinions of DNV against the Four Common Elements of GBP/GBGLs*The four elements are criteria of transition finance in the format of use of proceeds instrument, andgreen bonds stated below can be read as transition finance (bond) partially.

GBP-1. Use of Proceeds
JERA has defined the eligibility criteria as transition projects that aligned with its
Transition Strategy and related handbooks, principles and guidelines (CTF-H and CTFBG). Table-6 (Re-posted) shows the eligibility criteria of JERA's Transition Finance and theoverview of the projects.

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Table-6 (reposted) JERA's Main Initiatives to Achieve Carbon Neutrality(Transition Finance and Nominated Projects)
Project categories

Eligibility Criteria

Project Overview (Main Expenditure)①

Demonstration study of 20% ammonia co-firing in 1 million
kW class coal-fired power plant- Project period: June 2021 - March 2025
- Project description: Development and demonstration test oftechnology to convert 20% of fuel (calorific value ratio) toammonia at Hekinan Thermal Power Station Unit 4 (toFY2024)※ Adoption of New Energy and Industrial Technology
Development Organization (NEDO) subsidized project"Development of Technologies for Carbon Recycling and NextGeneration Thermal Power Generation / Research,
Development and Demonstration of Technologies for Ammonia
Co-Firing Thermal Power Generation"②

Demonstration study on actual equipment to establish
technology for high ammonia co-firing rate at commercial
thermal power plants- Project period: FY2021 to FY2028- Project description: Development of a new ammonia high-Transition Project
Projects for therealization of zeroCO2 emission
thermal power

The expenditures
related todemonstration
projects of fossil fuels
andammonia/hydrogenco-firing

efficiency burner and study of the specifications of theequipment (to FY 2024), and demonstration tests to convert
more than 50% of the fuel (calorific value ratio) to ammonia at
the Hekinan thermal power station (to FY2028).
※ Adoption of NEDO Green Innovation Fund Project"Establishment of Fuel Ammonia Supply Chain Project”③

Demonstration of high co-firing rate at thermal power station
using ammonia single-fuel burners- Project period: FY2021 to FY2028- Project description: Development of a new ammonia singlefuel burner and study of the specifications of the equipment(to 2024), and conducting technology development anddemonstration tests to convert more than 50% of the fuel(calorific value ratio) to ammonia at two different boiler units(to FY2028).
※ Adoption of NEDO Green Innovation Fund Project"Establishment of Fuel Ammonia Supply Chain Project”④

Technical verification of hydrogen co-firing power generation
for the construction of a large-scale hydrogen supply chain- Project period: October 2021 to March 2026
- Project description: Conducting demonstration tests at largescale LNG-fired power plants in Japan to convert
approximately 30% (by volume) of LNG into hydrogen for
power generation (to FY2025).

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JERA Co., Inc. JERA Transition Bond Framework Second Party Opinion Rev1.0※ Adoption of NEDO Green Innovation Fund project for“Construction of a large-scale hydrogen supply chain”

The expenditures
related todecommissions ofinefficient thermal
power plants, with theaim of replacement for
high-efficiency thermal
power plants⑤

Demolition of existing power generation facilities at Goi⑥

Demolition of existing power generation facilities at Chita

Thermal Power Station (LNG)

Thermal Power Station (LNG)(Demolition plan is in preparation)

DNV has confirmed that JERA plans to allocate the net proceeds from Transition Financeto financing and refinancing the capital investments, operating expenses, investments,
R&D expenses and demobilization cost of eligible transition projects that in line with
JERA's investment plans for implementation of its transition strategy.
These projects are representative projects exemplified by CTFH/CTFBG and GBP/GBGLs
that contribute to business transformation. These projects also directly or indirectly
support the decommissioning of inefficient coal-fired thermal power and the shift to LNG
and ammonia/hydrogen co-firing. Moreover, they contribute to the achievement of thetransition roadmap for electricity sector of METI. These projects are regarded as having
clear and positive environmental impacts in line with JERA's Transition Strategy, and are
expected to contribute to the SDGs. The projects are aligned with GBP-1.
Table-7 shows the details of six transition projects falling under the two eligibility criteria
to which the proceeds of the Transition Bond (to be issued in May 2022) will beallocated.

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Table-7 Transition Bonds (to be issued in May 2022) Details of Transition Projects
Eligibility Criteria

Project Overview (Main Expenditure)
Project Name: Demonstration study of 20% ammonia co-firing in 1 million
kW class coal-fired power plant
Project Overview: Development and demonstration test of technology toconvert 20% of fuel (calorific value ratio) to ammonia at Hekinan Thermal
Power Station Unit 4 (to FY2024).

①

Project Period: June 2021 - March 2025
Environmental Impacts: The overview and progress status of project will bereported.
Project Name: Demonstration study on actual equipment to establish
technology for high ammonia co-firing rate at commercial thermal power
plants
Project Overview: Development of a new ammonia high-efficiency burnerand study of the specifications of the equipment (to FY 2024), anddemonstration tests to convert more than 50% of the fuel (calorific value
ratio) to ammonia at the Hekinan thermal power station (to FY2028).

②
The expenditures
related todemonstration
projects of fossil
fuels andammonia/hydrogenco-firing③

Project Period: FY2021 to FY2028
Environmental Impacts: The overview and progress status of project will bereported.
Project Name: Demonstration of high co-firing rate at thermal power station
using ammonia single-fuel burners
Project Overview: Development of a new ammonia single-fuel burner andstudy of the specifications of the equipment (to 2024), and conducting
technology development and demonstration tests to convert more than 50%of the fuel (calorific value ratio) to ammonia at two different boiler units (toFY2028).
Environmental Impacts: The overview and progress status of project will bereported.
Project Name: Technical verification of hydrogen co-firing power
generation for the construction of a large-scale hydrogen supply chain
Project Overview: Conducting demonstration tests at large-scale LNG-fired
power plants in Japan to convert approximately 30% (by volume) of LNG intohydrogen for power generation (to FY2025).

④

Project Period: October 2021 to March 2026
Environmental Impacts: The overview and progress status of project will bereported.

⑤

The expenditures
related todecommissions ofinefficient thermal
power plants, withthe aim ofreplacement for

Project Name: Demolition of Goi Thermal Power Station
Project Overview: Demolition of existing power generation facilities at Goi
Thermal Power Station (LNG)
Completion of Demolition work: September 2023
Environmental Impacts: The overview and progress status of project will bereported.

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high-efficiency
thermal power
plants⑥

Project Name: Demolition of Chita Thermal Power Station
Project Overview: Demolition of existing power generation facilities at Chita
Thermal Power Station (LNG)(Demolition plan is in preparation)
Completion of Demolition work: TBD
Environmental Impacts: The overview and progress status of project will bereported.

Examples of Representative Transition Projects

Photo-1 Project 1: JERA Hekinan Thermal Power

Photo-2 Project 5: JERA Goi Thermal Power

Station Unit 4

Station

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JERA Co., Inc. JERA Transition Bond Framework Second Party Opinion Rev1.0

GBP-2. Process for Project Evaluation and Selection
JERA confirms that the transition projects contribute to the achievement of its
Transition Strategy. In addition, JERA also confirms that the following contents (<Exclusion Criteria>) are included in the Framework. Specifically, JERA's Finance Groupwill select nominated Eligible Projects as specified in the eligibility criteria and therelated business departments will analyze and review the financial risks, technical andoperational risks, market environment and ESG risks comprehensively. After that,
Executive Officer, Head of the Finance Group will be responsible for selecting the
Eligible Projects. The process had been established and will be executed in line with
the normal operation of JERA. DNV confirmed that that the plan will be implemented
in accordance with the appropriate process.
< Exclusion Criteria>-

Unfair transactions that do not comply with the laws and regulations of the country,
such as bribery, corruption, blackmail, embezzlement, etc-

Transactions that can cause social problems related to human rights and theenvironment

Evaluation and selection☒.

Conforms to the issuer’s achievement of☒environmental contribution goals☒.

Documented process to determine thatprojects fit within defined categories

The project is eligible for use of☒proceeds by green bond andDocumented process to identify and manage
potential ESG risks associated with the projecttransparency is ensured.
☒.

The project is evaluated and selected☐

Other (please specify):

based on the published standard
summary

Information on Responsibilities and Accountability☒

Evaluation / Selection criteria subject to☒.

In-house assessment

external advice or verification☐

Other (please specify):

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GBP-3. Management of Proceeds
The proceeds will be deposited into JERA’s common account, and JERA's FinanceGroup will manage the allocation for each project using the accounting manual,accounting system and proceeds management forms for transition bonds.
The usage of accounting manual and accounting system as well as other applicablesystems enables JERA's Finance Group to trace the proceeds over the redemption or
repayment period. JERA's Finance Group will review the allocation status at least oncea year, based on the proceeds management forms for transition bonds. Vouchers
related to the management of the proceeds will be kept in accordance with accounting
manual.
Such allocation to the Eligible Projects will be made within three years from theissuance. If the proceeds are to be used for refinancing existing expenditures, thelook-back period is three years from the time of the financing, and the proceeds willbe allocated to the eligible transition projects in accordance with the process set out in
GBP-2.
The unallocated proceeds will be managed in cash or cash equivalents until theproceeds have been fully allocated.
Prior to any transition finance executed under this Framework in the future, themanagement of proceeds will be disclosed in legal documents.

Tracking of Proceeds:☒

Some or all of the proceeds by green bonds that are planned to be allocated are☐Disclosure of intended types of temporary investment instruments for unallocated proceeds☒

Other (please specify): Unallocated proceeds are managed in cash or cash equivalents

systematically distinguished or tracked by the issuer.

Additional Disclosure:☐

Allocations to future investments only☐

Allocations to both existing and future☒

Allocation to individual disbursements☐

Allocation to a portfolio of disbursements☐

Disclosure of portfolio balance of☐

Other (please specify):

investments

unallocated proceeds

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GBP-4. Reporting
DNV confirmed that the issuer will report on transition finance (annually) until theproceeds are allocated, and will disclose the allocation status. As for the positiveenvironmental impacts, DNV confirmed that JERA plans to report on the overview andprogress of eligible projects been allocated until the completion of eligible projects.
DNV confirmed that even after the allocation plan or the allocation itself is completed,
JERA will disclose information through reports on a timely basis or in the event of any
significant change in transition strategy and pathway, the allocation plan andimplementation status of projects.
Reports will be disclosed on the issuer’s website.
<Allocation Status>
Eligibility Criteria been allocated and the aggregated amount of proceeds
allocated to the Eligible Projects at Eligibility Criteria levelThe amount of unallocated proceeds and management methods

The amount of proceeds used for existing investments<Positive Environmental Impacts>
Positive environmental impacts are disclosed as overviews of the projects(including progress, completion, operation, etc.) within the scope ofconfidentiality, to the extent practicable, and in consideration of thecharacteristics of the project.

<Others>

Efforts to achieve zero CO2 emissions by 2050 will be reviewed in a timely
manner based on policies, technological trends, etc. and disclosed whenevernecessary.

Table-8 shows the reporting plans (calculation methods) for positive environmental
impacts of the six projects that will be financed by the scheduled transition bonds.

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Table-8 Calculating Methods of the Positive Environmental Impacts (Six Eligible Projects of
the Scheduled Transition Bonds)
Eligibility Criteria

Project Name and Overview

Positive Environmental Impact

Demonstration study of 20% ammonia cofiring in 1 million kW class coal-fired power
plant
NEDO subsidized project "Development of①

Technologies for Carbon Recycling and NextGeneration Thermal Power Generation /Research, Development and Demonstrationof Technologies for Ammonia Co-Firing
Thermal Power Generation"
Demonstration study on actual equipment toestablish technology for high ammonia co-②

The expenditures
related todemonstration
projects of fossil
fuels andammonia/hydrogenco-firingfiring rate at commercial thermal power
plantsAdoption of NEDO Green Innovation Fund
Project "Establishment of Fuel Ammonia
Supply Chain Project”
Demonstration of high co-firing rate atthermal power station using ammonia
single-fuel burners③

Adoption of NEDO Green Innovation Fund
Project "Establishment of Fuel Ammonia
Supply Chain Project”
Technical verification of hydrogen co-firing
power generation for the construction of alarge-scale hydrogen supply chain④

Adoption of NEDO Green Innovation Fundproject for “Construction of a large-scalehydrogen supply chain”⑤⑥

The expenditures
related todecommissions ofinefficient thermal
power plants, withthe aim ofreplacement for
high-efficiency
thermal power
plantsDemolition of existing power generation
facilities at Goi Thermal Power Station (LNG)

Demolition of existing power generation
facilities at Chita Thermal Power Station(LNG)(Demolition plan is in preparation)

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The overview and progress status ofproject will be reported.

JERA Co., Inc. JERA Transition Bond Framework Second Party Opinion Rev1.0

Use of Proceeds Reporting☐

Project-by-project☐

On a project portfolio basis☐

Linkage to individual bond(s)☒Other (please specify): Eligible Criteria basis☐

GB refinanced share of total investment

Information Reported:☒

Allocated amounts☐

Other (please specify):

Frequency:☒

Annual☐Other (please specify):☐

Semi-annual

Impact Reporting (Environmental Impacts):☒

Project-by-project☐

On a project portfolio basis☐

Linkage to individual bond(s)☐Other (please specify):

Frequency:☒

Annual☐Other (please specify):☐

Semi-annual☐

Energy savings

Information Reported (Expected or Ex-post):☐

GHG Emissions / Savings☒

Other ESG indicators (please
specify): Overview project andprogress status of project

Means of Disclosure☐

Information published in financial☐

report (Integrated Report)☐

Information published in ad hoc
documents☐

Information published in sustainability
report☒Other (please specify): disclosed on
websiteReporting reviewed (if yes, please specify which parts of the reporting are subject toexternal review)

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VII. Assessment Conclusion
On the basis of the information provided by JERA and the work undertaken, it is DNV’sopinion that the JERA Transition Bond Framework and Transition Bond issued by JERA
meets the criteria established in the Protocol, and that it is aligned with the following
stated definition or purpose of climate transition finance for bonds that specify the useof proceeds within the CTFH/CTFBG, GBP/GBGLs, GLP/GLGLs.
“provide an investment opportunity with transparent sustainability credentials”“enable capital-raising and investment for new and existing projects withenvironmental impacts"

DNV Business Assurance Japan K.K.
12 May 2022

Mark Robinson

Naoki Maeda

Manager, Sustainability Services

Managing Director

DNV Business Assurance, Australia

DNV Business Assurance Japan K.K.

Masato Kanedome

Tsuyoshi Katori

Project leaders

Assessor

DNV Business Assurance Japan K.K.

DNV Business Assurance Japan K.K.

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JERA Co., Inc. JERA Transition Bond Framework Second Party Opinion Rev1.0
About DNV
Driven by our purpose of safeguarding life, property and the environment, DNV enables organisations to advance thesafety and sustainability of their business. Combining leading technical and operational expertise, risk methodology andin-depth industry knowledge, we empower our customers’ decisions and actions with trust and confidence. We
continuously invest in research and collaborative innovation to provide customers and society with operational andtechnological foresight.
With our origins stretching back to 1864, our reach today is global. Operating in more than 100 countries, our 16,000
professionals are dedicated to helping customers make the world safer, smarter and greener.

Disclaimer
Responsibilities of the Management of the Issuer and the Second-Party Opinion Providers, DNV : The management ofIssuer has provided the information and data used by DNV during the delivery of this review. Our statement represents
an independent opinion and is intended to inform the Issuer management and other interested stakeholders in the Bond
as to whether the established criteria have been met, based on the information provided to us. In our work we haverelied on the information and the facts presented to us by the Issuer. DNV is not responsible for any aspect of thenominated assets referred to in this opinion and cannot be held liable if estimates, findings, opinions, or conclusions areincorrect. Thus, DNV shall not be held liable if any of the information or data provided by the Issuer’s management andused as a basis for this assessment were not correct or complete

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Schedule-1 JERA Transition Bond Nominated Eligible Projects
The projects listed in the table are transition finance candidates that have been evaluated for eligibility at the time of pre-issue eligibility assessment (as ofFebruary 2022). In the future, bonds issued under the JERA Transition Bond Framework will be selected from one or more of the eligible project candidates
and disclosed before financing in the legal documents or reported in post-financing reports. If additional transition projects are included, eligibility will be
evaluated in advance by JERA in accordance with the JERA Transition Bond Framework and, if necessary, DNV will evaluate them in a timely manner.
Project Overview (Main Expenditure)①

Demonstration study of 20% ammonia co-firing in 1 million kW class coal-fired power plant- Project period: June 2021 - March 2025
- Project description: Development and demonstration test of technology to convert 20% of fuel (calorific value ratio) to ammonia at
Hekinan Thermal Power Station Unit 4 (to FY2024)※ Adoption of New Energy and Industrial Technology Development Organization (NEDO) subsidized project "Development of Technologies
for Carbon Recycling and Next-Generation Thermal Power Generation / Research, Development and Demonstration of Technologies forAmmonia Co-Firing Thermal Power Generation"
The expenditures related to1)②Demonstration study on actual equipment to establish technology for high ammonia co-firing rate at commercial thermal power plants- Project period: FY2021 to FY2028

demonstration projects of fossil- Project description: Development of a new ammonia high-efficiency burner and study of the specifications of the equipment (to FY

fuels and ammonia/hydrogen co-2024), and demonstration tests to convert more than 50% of the fuel (calorific value ratio) to ammonia at the Hekinan thermal power

firingstation (to FY2028).
※ Adoption of NEDO Green Innovation Fund Project "Establishment of Fuel Ammonia Supply Chain Project”③

Demonstration of high co-firing rate at thermal power station using ammonia single-fuel burners- Project period: FY2021 to FY2028- Project description: Development of a new ammonia single-fuel burner and study of the specifications of the equipment (to 2024),
and conducting technology development and demonstration tests to convert more than 50% of the fuel (calorific value ratio) toammonia at two different boiler units (to FY2028).

※ Adoption of NEDO Green Innovation Fund Project "Establishment of Fuel Ammonia Supply Chain Project”

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JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0④

Technical verification of hydrogen co-firing power generation for the construction of a large-scale hydrogen supply chain- Project period: October 2021 to March 2026
- Project description: Conducting demonstration tests at large-scale LNG-fired power plants in Japan to convert approximately 30%(by volume) of LNG into hydrogen for power generation (to FY2025).

※ Adoption of NEDO Green Innovation Fund project for “Construction of a large-scale hydrogen supply chain”
The expenditures related to2)

decommissions of inefficient
thermal power plants, with theaim of replacement for highefficiency thermal power plants⑤

Demolition of existing power generation facilities at Goi Thermal Power Station (LNG)⑥

Demolition of existing power generation facilities at Chita Thermal Power Station (LNG)(Demolition plan is in preparation)

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JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Schedule-2 Climate Transition Bond Eligibility Assessment Protocol
The checklists (1-4) below are DNV evaluation procedures created for JERA Transition Bond Framework and Transition Bond Eligibility Evaluation based on thedisclosure requirements of CTFH and CTFBG. The "confirmed documents" in the Work Undertaken include public or private documents (internal documents of theissuer or borrower), etc., and are provided by JERA as evidence of eligibility judgment for DNV. *Please replace “Issuer”, “Investor” to “Borrower/Fundraiser”,“Lender” in the context in the following requirements.

Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

1

Issuer’s Climate
Transition
Strategy andGovernance

The financing purpose should be forenabling an issuer’s climate change
strategy. A ‘transition’ label applied to a
debt financing instrument should serve tocommunicate the implementation of anissuer’s corporate strategy to transform thebusiness model in a way which effectively
addresses climate-related risks andcontributes to alignment with the goals of
the Paris Agreement.

Confirmed documents
Framework
JERA Zero CO2 Emissions
2050
JERA Zero CO2 Emissions
2050 Roadmap for its
Business in Japan(Updated in May 2022)
JERA Environmental
Target 2030

JERA released "JERA Zero CO2 Emissions 2050", the goalof achieving zero CO2 emissions by 2050, and “JERA Zero
CO2 Emissions 2050 Roadmap for its Business in Japan”
in October 2020. JERA has set a long-term goal of CO2
zero emission by 2050, which is consistent with the goalof the Paris Agreement, and also has set the mediumterm goals “JERA Environmental Target 2030” to achieve
its long-term goal. JERA disclosed its strategic plan toachieve the goal of transitioning to carbon neutrality in its
roadmap.

< Suggested information and indicators>•••

A long-term target to align with thegoals of the Paris Agreement (e.g. theobjective of limiting global warming
ideally to 1.5℃ and, at the very least,
to well below 2℃);
Relevant interim targets on the
trajectory towards the long-term goal;
Disclosure on the issuer’s levers
towards decarbonisation, and strategic

JERA Environmental

Target 2035
JERA Group Corporate
Communication Book
2021 (Integrated Report)
Information related toeach project
METI, “Transition
roadmap for theelectricity sector”
Interviews with stakeholders

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Based on the science-based long-term targets quantified
by JERA, DNV has reviewed and confirmed that JERA's
targets correspond to achieving the goals of the Paris
Agreement. JERA sets corporate environmental strategies
that are important to its business model based on theidentification of risks and opportunities and scenario
analysis referred to TCFD guidance.
In May 2022, JERA added a target to accelerate further
its efforts to achieve the realization of CO2 zero
emissions, aiming to reduce CO2 emissions from domestic
operations by at least 60% (relative to FY2013) by FY

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Ref.

Criteria

Requirements••

Work Undertakenplanning towards a long-term target toalign with the goals of the Paris
Agreement;
Clear oversight and governance oftransition strategy and,Evidence of a broader sustainability
strategy to mitigate relevant
environmental and social externalities
and contribute to the UN Sustainable
Development Goals.

DNV Findings
2035 with the establishment of the "JERA Environmental
Target 2035" and the update of the “JERA Zero CO2Emissions 2050 Roadmap for its Business in Japan”.
Furthermore, JERA have developed a more ambitioustransition strategy including clarifying the timing of fullscale operation at 20% and 50% ammonia co-firing rates
in coal-fired thermal power generation, which isconsistent with the transition roadmap for the electricity
sector of METI.
Specifically, JERA's Transition Strategy is consistent withthe transition roadmap for the electricity sector of METI
and is incorporated with its activity plan which referred to
the TCFD guidance. In addition, in order to achieve
continuous emission reductions in the future, JERA plansto review its efforts in a timely and appropriate manner,considering the development status of the corresponding
technology and the timeline.
JERA recognizes that response to climate change,
including the implementation of Transition Strategy, is
one of the most significant issues of its business, and has
established system and Framework to promote theinitiatives specified in “JERA Zero CO2 Emissions 2050”, ”
and “JERA Zero CO2 Emissions 2050 Roadmap for its
Business in Japan (Updated in May 2022)”, “JERA
Environmental Target 2030” and “JERA Environmental
Target 2035” at the management level.
As a global company that provide energy solutions not
only in Japan, but also around the world, JERA considers
global warming countermeasures as its highest-priority
management issue. Given that there are many countries
in the world experiencing such remarkable growth that

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Ref.

Criteria

Requirements

Work Undertaken

DNV Findings
the supply of power is unable to keep up while there arealso many areas that remain non-electrified and are inneed of power generation facilities, JERA's mission is not
only to provide optimal, environmentally conscious power
solutions to these countries and regions, but also tocreate jobs via the power facility construction process aswell as to cultivate human resources through theprovision of technology and expertise. In turn, these willserve as springboards for further growth anddevelopment of industries, communities, and societies.
Through these activities, JERA aims to broadly contributeto achieving the Sustainable Development Goals (SDGs)
set by the United Nations. Among the materiality issues
identified in the JERA Group Corporate Communication
Book 2021 (Integrated Report)", transition finance mainly
relates to "Expansion of decarbonization/Renewableenergy" and "Improvement of thermal efficiency ofthermal power generation".
DNV has confirmed that the implementation plan
provided by JERA, which is established based on the
Framework, “JERA Zero CO2 Emissions 2050” and “JERA
Zero CO2 Emissions 2050 Roadmap for its Business inJapan (Updated in May 2022)”, is well aligned with
JERA's Transition Strategy. Through the assessment,
DNV has also confirmed that the implementation planestablished based on its Transition Strategy is reliable,
ambitious and achievable.

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Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

2

Business model
environmental
materiality

The planned climate transition trajectoryshould be relevant to the environmentallymaterial parts of the issuer’s businessmodel, taking into account potential futurescenarios which may impact on current
determinations concerning materiality.

Confirmed documents
Framework
JERA Zero Co2 Emissions
2050
JERA Zero CO2 Emissions
2050 Roadmap for its
Business in Japan(Updated in May 2022)
JERA Environmental
Target 2030
JERA Environmental
Target 2035
JERA Group Corporate
Communication Book
2021(Integrated report)
METI, “Transition
roadmap for theelectricity sector”
Interviews with stakeholders

DNV assessed whether the key activities related to JERA's
business correspond to the contribution to theenvironment and the JERA's transition strategy
evaluated.
JERA's non-consolidated greenhouse gas emissions inJapan (FY2020) are shown below.
Scope 1: 114,950,000 t-CO2
Scope 2: 0.40,000 t-CO2
Scope3: 20,680,000 t-CO2
Total: 135,640,000 t-CO2
Scope

GHG Emissions (CO2equivalent)

Scope1

114,950,000 t-CO2

Scope 24,000 t-CO2

Scope3

20,680,000 t-CO2

Total

135,640,000 t-CO2

Scope 1: Direct emissions of greenhouse gases by the company itself(combustion of fuels, industrial processes)
Scope 2: Indirect emissions from the use of electricity, heat and steam
supplied by other companies
Scope 3: Indirect emissions other than Scope 1 and 2 (emissions fromother companies related to the company’s’ activities)＊Data includes emissions of Hitachi Naka Generation Co. Inc.
＊The greenhouse gases covered are CO2, CH4 (methane), N2O (nitrous
oxide), SF6 (sulphur hexafluoride) and HFC (alternative freon).

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Ref.

Criteria

Requirements

Work Undertaken

DNV Findings
Given the fact that indirect emissions from power
generation accounts for 38% of the CO2 emissions per
final energy consumption in Japan where JERA operates,
the transition strategy of JERA, whose major emissions
come from its thermal power generation, will not only
contribute to reducing emissions from its own businessactivities (Scope 1 and 2), but also contribute toachieving the decarbonization goals of diverse entities. In
other words, JERA's approach towards transition aiming
to achieve decarbonization at a lower cost and higher
speed while maintaining stable energy supply, will
directly support its own transition as well as the transitionof society as a whole.
JERA's roadmap is aligned with the transition roadmap
for the electricity sector of METI.
DNV confirmed that JERA's plan to implement its
Transition Strategy is one of the activities of JERA's corebusiness and is closely linked to the activities that
contribute to the CO₂ reduction of the society as a whole,thus will contribute to the overall environment. JERA's
Transition Strategy is associated with the materiality that
JERA has identified by facilitating GRI standards*1,
ISO26000, SASB standards*2, etc., and will contribute to
generate significant positive environmental impacts both
qualitatively and quantitatively.
*1: Global Reporting Initiative (an international standard
providing ESG-related reporting, management andanalysis methods)

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Ref.

Criteria

Requirements

Work Undertaken

DNV Findings*2: A disclosure standard developed by the Sustainable
Accounting Standards Board on ESG factors that are
expected to have a high financial impact in the future3

Climatetransition
strategy to bescience-based
includingtargets andpathways

Issuer’s climate strategy should reference
science-based targets and transition
pathways. The planned transition trajectoryshould:••••be quantitatively measurable (based ona measurement methodology which isconsistent over time);be aligned with, benchmarked orotherwise referenced to recognized,
science-based trajectories where suchtrajectories exist;
be publicly disclosed (ideally inmainstream financing filings), include
interim milestones, and;be supported by independent assurance
or verification< Suggested information and indicators>•••

Short, medium, and long-term
greenhouse gas reduction targets
aligned with Paris Agreement;
Baseline
Scenario utilised, and methodology
applied (e.g. ACT, SBTi, etc.);

Confirmed documents
Framework
JERA Zero Co2 Emissions
2050
JERA Zero CO2 Emissions
2050 Roadmap for its
Business in Japan(Updated in May 2022)
JERA Environmental
Target 2030-

JERA Environmental

Target 2035
JERA Group Corporate
Communication Book
2021(Integrated report)
METI, “Transition
roadmap for theelectricity sector”
Interviews with stakeholders-

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JERA has set a transition plan consistent with the Paris
Agreement, which is science-based, and a transition
trajectory consistent with the transition roadmap for theelectricity sector of METI. The transition roadmap for theelectricity sector refers to the Sixth Strategic Energy Plan,
which is in line with the Plans for Global WarmingCountermeasures. These are established based onJapanese government's aim to achieve carbon neutrality
in 2050 and to reduce greenhouse gas emissions by 46%
in 2030 compared to the FY2013 level referring to IPCC
1.5°C Special Report. These plans are consistent with theParis Agreement.
DNV has confirmed that JERA's Transition Strategy
quantified emission intensity, absolute value and ratio
based on a consistent methodology with prescribedassumptions. Specifically, JERA sets out the following
transition targets in its roadmap.
TABLE JERA TRANSITION TARGETS

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Ref.

Criteria

Requirements••

Work Undertaken

DNV Findings

Greenhouse gas objectives covering all
scopes (Scope 1, 2 and 311); and,Targets formulated both in intensity
and absolute terms

FY 2030
 Reduce carbon emission intensity of thermal
power plants by 20% based on the long-term
energy supply-demand outlook for FY 2030 as
set by the government.
 Shut down all inefficient (supercritical or less)coal power plants
 Promote demonstration of mixed combustion
with ammonia at high-efficiency (ultrasupercritical) power plants
MEDIUMTERM
GOALS

 Promote the development of renewable energy
cantered on offshore wind power projects
 Work to further improve the efficiency of LNG
thermal power generation
FY 2035
 Reduce CO2 emissions from domestic operations
by at least 60% (relative to FY 2013) by FY
2035.
 Given the expanded adoption of renewableenergy based on the national government’s
2050 carbon neutral policy, JERA will strive todevelop and adopt renewable energy in Japan Work to reduce carbon emission intensity fromthermal power generation by promotinghydrogen and ammonia co-firing

LONG-TERM
GOALS CO2 zero emissions

JERA's roadmap will be refined in stages based on policy andother assumptions. The roadmap will also be revised if theassumptions change significantly.

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Criteria

Requirements

Work Undertaken

DNV Findings
In Japan, where indirect emissions from electricity
account for 38% of the total CO2 JERA's transition
strategy contributes not only to the reduction ofemissions from its own operations (Scope 1 and 2), butalso to the achievement of the decarbonization targets ofvarious bodies.
Transition initiatives and respective scope emissions aredisclosed in “JERA Zero CO2 Emissions 2050”, “JERA Zero
CO2 Emissions 2050 Roadmap for its Business in Japan(Updated in May 2022)” and “JERA Group Corporate
Communication Book 2021(Integrated report)”, etc.

4

Implementationtransparency

Market communication in connection withthe offer of a financing instrument which
has the aim of funding the issuer’s climatetransition strategy should also provide
transparency to the extent practicable, ofthe underlying investment program
including capital and operational
expenditure. This may include R&D-related
expenditure where relevant, and details of
where any such operating expenditure isdeemed ‘non-Business as Usual’, as well asother relevant information indicating how
this program supports implementation of
the transition strategy, including details ofany divestments, governance and processchanges.
<Suggested information and indicators>

Confirmed documents
Framework
JERA Zero Co2 Emissions
2050
JERA Zero CO2 Emissions
2050 Roadmap for its
Business in Japan(Updated in May 2022)
JERA Environmental
Target 2030--

JERA Environmental
Target 2035
JERA Group Corporate
Communication Book
2021(Integrated report)
METI, “Transition
roadmap for theelectricity sector”

Page of 55 of 121

DNV confirmed that the investment and project plans
related to JERA's transition strategy included investments
and expenditures that has been implemented and arescheduled in the future. DNV also confirmed that theoverall investment plan (investment amount) will be
executed in accordance with the timeline. DNV confirmedthat in order to ensure transparency, JERA will discuss on
the disclosure, wherever possible, of its basic investment
plan (investment amount).
DNV also reviewed the Framework and the ESG
management of JERA and confirmed high transparency inthe implementation. JERA explained the appropriatenessof its execution to DNV and DNV agreed on theappropriateness.

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

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Criteria

Requirements••

Disclosure on the percentage ofassets/revenues/
expenditures/divestments aligned to
the various levers outlined in Element 1
above;
Capex roll-out plans consistent with theoverall strategy and climate science

Work Undertaken
Interviews with stakeholders

Page of 56 of 121

DNV Findings

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Schedule-3 Green Bond (Transition Finance with specific use of proceeds) Eligibility Assessment
ProtocolThe checklist below (GBP/GLP-1 to GBP/GLP-4) is a DNV evaluation procedure created for JERA Transition Finance (Bond) Eligibility Assessment (Bond with specificuse of proceeds) based on the requirements of GBP/GBGLs and GLP/GLGLs. "Confirmed documents" in the “Work Undertaken” includes documents inside the issuer
and is provided by JERA as evidence of eligibility judgment for DNV.
In Schedule-3, it is referred to as GBP or GLP according to the practice, but this is the standard to be referred to in the case of financing that specifies the use ofproceeds such as transition projects in transition finance (bonds) that specifies the use of proceeds based on CTFH and CTFBG, so please read as the meaning of
the transition as appropriate.

GBP/GLP-1 Use of proceeds
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

1aTypes of funds

The types of green/transition finance areclassified into one of the following types
defined by GBP.
· (Standard) Green/transition Bond/Loan・ Green/transition Revenue Bond/Loan・ Green/transition Project Bond/Loan・ Other

Confirmed documents- Framework

Through the evaluation work, DNV confirmed that JERATransition Finance (bond) fall into the following categories:

Interviews withstakeholders(Standard) Green/transition Bond

1b

Green/transition
Project
Classification

The key to a green/transition bond is thatthe proceeds will be used for a green
project, which should be properly statedin the legal documents relating to thesecurity.

Confirmed documents- Framework- Investment planfor the use ofproceeds- Information
related to eachproject

Page of 57 of 121

DNV confirmed that JERA Transition Bond aims to fund transition
projects focused on JERA's environmental goals and transition
strategy, as described in the Framework and Schedule-1.
Specifically, all Transition Finance Eligible Project Candidates
listed in Schedule-1 are evaluated as conforming to theTransition Strategy, and the proceeds through Transition Financeare planned to be financed one or more of the Transition Finance
Eligible Project Candidates. If a transition project is pre-selected

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Criteria

Requirements

Work Undertaken-

Amendment
Shelf Registration
StatementInterviews withstakeholders

DNV Findings
before the financing is implemented, this will be disclosed in legal
documents.
Through the assessment, DNV concludes that the Transition
eligible projects candidates will bring concrete and actual
environmental impacts.
Table JERA's Main Initiatives to Achieve Carbon Neutrality(Transition Finance and Nominated Projects)
Eligibility

Project Overview (Main Expenditure)

Criteria①

Demonstration study of 20% ammonia cofiring in 1 million kW class coal-fired power
plant

The
expenditures
related todemonstration
projects of fossil
fuels andammonia/hydrogen co-firing- Project period: June 2021 - March 2025
- Project description: Development anddemonstration test of technology to convert
20% of fuel (calorific value ratio) to ammonia
at Hekinan Thermal Power Station Unit 4 (toFY2024)※ NEDO subsidized project "Development ofTechnologies for Carbon Recycling and NextGeneration Thermal Power Generation /Research, Development and Demonstration ofTechnologies for Ammonia Co-Firing Thermal
Power Generation"

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Criteria

Requirements

Work Undertaken

DNV Findings②

Demonstration study on actual equipment toestablish technology for high ammonia cofiring rate at commercial thermal power plants- Project period: FY2021 to FY2028- Project description: Development of a newammonia high-efficiency burner and study ofthe specifications of the equipment (to FY2024), and demonstration tests to convert
more than 50% of the fuel (calorific value
ratio) to ammonia at the Hekinan thermal
power station (to FY2028).
※ Adoption of NEDO Green Innovation Fund
Project "Establishment of Fuel Ammonia
Supply Chain Project”③

Demonstration of high co-firing rate atthermal power station using ammonia singlefuel burners- Project period: FY2021 to FY2028- Project description: Development of a newammonia single-fuel burner and study of thespecifications of the equipment (to 2024), andconducting technology development anddemonstration tests to convert more than
50% of the fuel (calorific value ratio) toammonia at two different boiler units (toFY2028).

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Ref.

Criteria

Requirements

Work Undertaken

DNV Findings※ Adoption of NEDO Green Innovation Fund
Project "Establishment of Fuel Ammonia
Supply Chain Project”④

Technical verification of hydrogen co-firing
power generation for the construction of alarge-scale hydrogen supply chain- Project period: October 2021 to March 2026
- Project description: Conducting
demonstration tests at large-scale LNG-fired
power plants in Japan to convert
approximately 30% (by volume) of LNG intohydrogen for power generation (to FY2025).
※ Adoption of NEDO Green Innovation Fundproject for “Construction of a large-scalehydrogen supply chain”

The⑤

expenditures

Demolition of existing power generation
facilities at Goi Thermal Power Station (LNG)

related todecommissionsof inefficient
thermal power
plants, with theaim ofreplacement for
high-efficiency
thermal power
plantsPage of 60 of 121⑥

Demolition of existing power generation
facilities at Chita Thermal Power Station (LNG)(Demolition plan is in preparation)

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Criteria

Requirements

Work Undertaken

DNV Findings

1cEnvironmental
benefits

All green projects to which the funds areused should have clear environmental
benefits, the effects of which should beassessed by the issuer and, where
possible, quantitatively demonstrated.

Confirmed documents- Framework- Investment planfor the use ofproceeds- Information
related to eachproject
Interviews withstakeholders

Transition projects will contribute to goals based on JERA’s
Transition Strategy, and to low and decarbonized emissions
through the two eligible criteria categories indicated in 1b. The
environmental impact is the reduction of CO2 emissions, which
has been quantitatively or qualitatively evaluated by the issuer.

Confirmed documents- Framework- Investment planfor the use ofproceeds- Information
related to eachproject
Interviews withstakeholders

JERA plans to use all proceeds for new investments, refinancing,or both for eligible project candidates included in Schedule-1. If it
is clear in advance whether to make new investment or refinancebefore implementing financing, it will be disclosed in legal
documents. DNV confirmed that if it is not yet clear, the Issuer
plans to disclose the amounts of the proceeds which wasallocated to refinancing through reporting (annual report).

1d

Refinancing rate

If all or part of the proceeds are used or
may be used for refinancing, the issuer
will indicate the estimated ratio of theinitial investment to the refinancing and,if necessary. Therefore, it isrecommended to clarify whichinvestment or project portfolio is subject
to refinancing.

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It was confirmed that, prior to the implementation of thetransition finance, only the outline of each project shall be
disclosed. In the annual report, the outline and progress of eachproject should be reported to the extent practicable, taking into
account the characteristics of the project.

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

GBP/GLP-2 Process for Project Evaluation and Selection
Ref.

Criteria

Requirements

Work Undertaken

DNV Findings

2aProject selection
process

Confirmed documents- Framework- Information
related to eachproject
Interviews withstakeholders

DNV confirmed that the issuer has a process and a system ofdetermining the eligibility of projects for which the transition
finance, and that the outline is specified in the Framework.

2b

Issuer's
Environmental andSocial Governance
Framework

Green bond issuers should provide an
overview of the process of qualifying
projects for which green bond funding will
be used. This includes (but is not limited
to):・The process by which the issuer
determines that the project in question is
included in the business category of aqualified green project.
・ Creation of criteria for eligibility of
projects for which green bond funding will
be used・ Environmental sustainability goals
In addition to criteria and certifications,the information published by issuers
regarding the green bond process also
considers the quality of performance of
the issuer's framework and environmental
sustainability.

Confirmed documents- Framework- Information
related to eachproject
Interviews withstakeholders

The issuer complies with environment-related laws, ordinancesand regulations, and considers that the effects of environmental
improvement such as CO2 reduction are clear in the entire life
cycle or each process when selecting transition projects to be
implemented.
In the operation and implementation of the project, each of thedepartments involved is committed to the preservation of thesurrounding environment.
DNV has confirmed that the transition projects implemented by
the issuer are consistent with issuer's management andenvironmental policies, as well as with the transition strategy,
goals and pathways.

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GBP/GLP -3 Management of Proceeds
Ref.

Criteria

3a

Tracking
procedure-1

3b

Tracking
procedure-2

3c

Temporary holding

Requirements

Work Undertaken

DNV Findings

The net proceeds from of Green bonds
should be managed in sub-accounts,
included in sub-portfolio, or otherwise
tracked. It should also be certified by theissuer in a formal internal process related
to the issuer's investment and financing
operations for the Green Project.

Confirmed documents
Framework
Funds
management
forms oftransition bonds
Accounting
regulations
Interviews withstakeholders

DNV has confirmed that the proceeds by the transition financing
can be tracked in line with the issuer's accounting system andconfirmed the systems or the systems to be planed for use andthe dedicated document to be created and other documents
actually used through the assessment, and confirmed that the
management status of the proceeds was proved.

During the green bond redemption
period, the balance of funds raised that isbeing tracked should be adjusted atregular intervals to match the amountallocated to eligible projects undertaken
during that period.

Confirmed documents- Framework- Funds
management
forms oftransition bonds- Accounting
regulations
Interviews withstakeholders

DNV confirmed that the issuer plans to periodically (at least
annually) review the balance of the transition finance by theaccounting system, the dedicated document to be created andothers described in 3a during the period from the implementationof the transition finance to its redemption or repayment.

If no investment or payment has been
made in a qualified green project, theissuer should also inform the investor of
the possible temporary investment
method for the balance of unallocatedproceeds.

Confirmed documents- Framework- Funds
management
forms oftransition bonds

DNV has confirmed that the confirmation process through theissuer's accounting system, the dedicated document to becreated and others is structured to ensure that the balance of
unallocated proceeds are recognized sequentially.

Page of 63 of 121

DNV confirmed through the Framework and Assessment that thebalance of unallocated proceeds will be managed in cash or cash
equivalents. DNV has also confirmed that the balance of

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Criteria

Requirements

Work Undertaken

DNV Findings

Accounting
regulations
Interviews withstakeholders

unallocated proceeds will be disclosed through reporting on the
allocation status of proceeds.

-

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GBP/GLP-4 Reporting
Ref.

Criteria

4aPeriodical
Reporting

Requirements

Work Undertaken

DNV Findings

In addition to reporting on the use ofproceeds and the temporary investmentof unallocated proceeds, the issuer willconsider each project at least once a year
for projects to which the Green bondproceeds have been allocated, taking into
account the following: A list of eachproject should be provided.
-Confidentiality and competitive
considerations-Outline of each project, expectedsustainable environmental and social
effects

Confirmed documents- Framework- Investment planfor the use ofproceeds- Funds
management
forms oftransition bonds- Information
related to eachproject
Interviews withstakeholders

DNV confirmed that the issuer will report on the transition
finance (annual report) until the proceeds are allocated, anddisclose information on the allocation status. As for theenvironmental improvement impacts, DNV confirmed that JERA
plans to conduct reporting on the overview and progress ofprojects for which funds have been allocated until the completionof eligible projects.
DNV also confirmed that, even after the allocation plan or
allocation has been completed, the issuer plans to report in atimely manner or in its reporting on any changes in transition
strategy or pathways, or any major changes in the allocation
plan or project implementation status (e.g. interruption of a
project for which allocation has been started, significant
postponement on an annual basis, sale or retirement, etc.).
The report will be disclosed on the website.
<Allocation Status>
 Eligible criteria and amounts to be allocated Balance of unallocated amounts and the management
method Amount of proceeds to be used for refinancing<Environmental Impacts>Page of 65 of 121

Environmental impacts are disclosed within the scopeof confidentiality, to the extent practicable, and inconsideration of the characteristics of the project,including an overview of the project (including

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Criteria

Requirements

Work Undertaken

DNV Findings
progress, completion, operation, etc.) and the expectedenvironmental benefits (e.g., t- CO2 /year).
<Others>

Efforts to achieve zero CO2 emissions by 2050 will be
reviewed as appropriate in light of policy andtechnological trends, and disclosed as required.

The currently planned reporting for the transition project is
described in the section of GBP/GLP-4. Reporting in thisdocument.

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JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Schedule-4: Basic Guidelines on Climate Transition Finance Eligibility Checklist
The following checklist (from CTF-1 to CTF-4) are based on four “disclosure elements “which indicated in the “Basic Guidelines on Climate Transition Finance (CTF)”
established by the Financial Services Agency, Ministry of Economy, Trade and Industry, and Ministry of the Environment in May 2021.
According to the CTF, “disclosure elements” are classified into the following three categories. Should:◎ recommend:〇 be considered/possible: △These expressions are used in the following context.
-

Items described with the word “should” are basic elements that financial instruments labelled as transition finance are expected to have.

-

Items described with the word “recommended” are elements that financial instruments labelled as transition finance are optimally recommended to have under-these Guidelines although instruments which do not have these items can also be labelled as “transition”.
Items described with the word “be considered” or “possible” are elements that these Guidelines provides as examples and interpretations although it is notconsidered problematic even if financial instruments labelled as transition finance do not have them.

There is a supplementary explanation in the margin of each checklist for the annotations in the disclosure elements.
The number /01/、/02/～/18/ listed in the “Work Undertaken” are documents confirmed through the eligibility evaluation work. Details (document name) are shownin Appendix. In addition to the confirmed documents, the “Work Undertaken” includes the case where the information obtained through discussions and interviews
with the issuer is used as evidence.

CTF-1 Fundraiser’s Climate Transition Strategy and Governance
Ref.

No.

Disclosure elements

◎

1-a)

Financing through transition
finance should aim to implement
or incentivize the achievement oftransition strategies9. Such
strategies should incorporate along-term target to align withthe goals of the Paris
Agreement, relevant interim
targets on the trajectory towards
the long-term goal, disclosure on
the levers towards
decarbonization, and fundraiser’s

Requirement checkYes
No
Not Applicable

Work Undertaken

DNV Findings

Confirmed documents:/01//02//03//04//17//18/
Interviews withstakeholders

The financing that JERA implements by utilizing transition
finance is aimed at achieving the JERA transition strategy
which is in line with the low carbon decarbonization strategy
set by the transition roadmap for electricity sector of METI,
which aims to align with the goals of the Paris Agreement.
JERA set a long-term goal of zero CO2 emissions by 2050 in
the “JERA Zero CO2 Emissions 2050 Roadmap for its Businessin Japan (Updated in May 2022)” as a goal of its transition
strategy.
JERA also incorporates the medium-term targets and its
strategic plan for decarbonization (a plan to introduce

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No.

Disclosure elements

Requirement check

Work Undertaken

strategic planning.

DNV Findings
technologies that contribute to the transition) into JERA
Environmental Target 2030”.
In "JERA Environmental Target 2035," JERA has established atarget to reduce CO2 emissions from its domestic operations byat least 60% (relative to FY 2013) by FY 2035.
TABLE JERA TRANSITION TARGETS
FY 2030
 Reduce carbon emission intensity of thermal power
plants by 20% based on the long-term energy supplydemand outlook for FY 2030 as set by the government.
 Shut down all inefficient (supercritical or less) coal power
plants Promote demonstration of mixed combustion withammonia at high-efficiency (ultra-supercritical) power
plantsMEDIUMTERM
GOALS

 Promote the development of renewable energy canteredon offshore wind power projects
 Work to further improve the efficiency of LNG thermal
power generation
FY 2035
 Reduce CO2 emissions from domestic operations by atleast 60% (relative to FY 2013) by FY 2035.
 Given the expanded adoption of renewable energy
based on the national government’s 2050 carbon neutral
policy, JERA will strive to develop and adopt renewableenergy in Japan Work to reduce carbon emission intensity from thermal
power generation by promoting hydrogen and ammonia
co-firing

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No.

Disclosure elements

Requirement check

Work Undertaken

DNV Findings
LONGTERM

 CO2 zero emissions

GOALS

JERA's roadmap will be refined in stages based on policy and otherassumptions. The roadmap will also be revised if the assumptions
change significantly.

◎
(△)

1-b)

A transition strategy should
serve to explicitly communicate
the implementation of anissuer’s strategy to transformthe business model in a way
which effectively addresses
climate-related risks andcontributes to achieving thegoals of the Paris Agreement10.
Transformation of a businessmodel is not limited to initiatives
as an extension of existing
businesses but can also betransformation based on various
other perspectives. It includes
fuel conversion that achieves
significant carbon and GHG
reduction benefits, introductionof innovative technologies,
improvement of / changes inmanufacturing processes andproducts, and development andprovision of products andservices in new fields.

Yes
No
Not Applicable

Confirmed documents:
01//02//03//04//05//15//16//17//18/
Interviews withstakeholders

The JERA’s Transition Strategy takes into account scenariosthat make use of the TCFD guidance. The JERA’s Transition
Strategy includes the significant reduction targets by 2030,
which realize to reduce carbon emission intensity of thermal
power plants by 20% based on the long-term energy supplydemand outlook for FY 2030 as set by the government,
regarding the thermal power generation business as its corebusiness. Regarding the coal power, shutting down all
inefficient (supercritical or less) power plants, promoting
demonstration tests of mixed combustion with ammonia at
high-efficiency (ultra-supercritical) power plants and themeasures of further improve the efficiency of LNG thermal
power generation are incorporated.
The following (table below) are listed as specific initiatives of
the transition strategy.
Table JERA's Main Initiatives to Achieve Carbon Neutrality(Transition Finance and Nominated Projects)
Eligibility
Criteria

Page of 69 of 121

Project Overview (Main Expenditure)

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

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No.

Disclosure elements

Requirement check

Work Undertaken

DNV Findings①

Demonstration study of 20% ammonia cofiring in 1 million kW class coal-fired power
plant- Project period: June 2021 - March 2025
- Project description: Development anddemonstration test of technology to convert
20% of fuel (calorific value ratio) toammonia at Hekinan Thermal Power Station
Unit 4 (to FY2024)※ NEDO subsidized project "Developmentof Technologies for Carbon Recycling andThe

Next-Generation Thermal Power Generation

expenditures/ Research, Development andrelated to

Demonstration of Technologies fordemonstration

Ammonia Co-Firing Thermal Powerprojects ofGeneration"

fossil fuels andammonia/hydrogen co-firing②

Demonstration study on actual equipment
to establish technology for high ammonia
co-firing rate at commercial thermal power
plants- Project period: FY2021 to FY2028- Project description: Development of a newammonia high-efficiency burner and studyof the specifications of the equipment (toFY 2024), and demonstration tests toconvert more than 50% of the fuel (calorificvalue ratio) to ammonia at the Hekinan
thermal power station (to FY2028).

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No.

Disclosure elements

Requirement check

Work Undertaken

DNV Findings※ Adoption of NEDO Green Innovation
Fund Project "Establishment of FuelAmmonia Supply Chain Project”③

Demonstration of high co-firing rate atthermal power station using ammonia
single-fuel burners- Project period: FY2021 to FY2028- Project description: Development of a newammonia single-fuel burner and study ofthe specifications of the equipment (to2024), and conducting technology
development and demonstration tests toconvert more than 50% of the fuel (calorificvalue ratio) to ammonia at two different
boiler units (to FY2028).
※ Adoption of NEDO Green Innovation
Fund Project "Establishment of FuelAmmonia Supply Chain Project”④

Technical verification of hydrogen co-firing
power generation for the construction of alarge-scale hydrogen supply chain- Project period: October 2021 to March
2026- Project description: Conducting
demonstration tests at large-scale LNG-

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JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

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No.

Disclosure elements

Requirement check

Work Undertaken

DNV Findings
fired power plants in Japan to convert
approximately 30% (by volume) of LNG
into hydrogen for power generation (toFY2025).
※ Adoption of NEDO Green Innovation
Fund project for “Construction of a largescale hydrogen supply chain”
The⑤

Demolition of existing power generation

expenditures

facilities at Goi Thermal Power Station

related to(LNG)

decommissionsof inefficient
thermal power
plants, with theaim ofreplacement for
high-efficiency⑥

Demolition of existing power generation
facilities at Chita Thermal Power Station(LNG)(Demolition plan is in preparation)

thermal power
plants〇1-c)

The implementation of atransition strategy assumes
cases where it affects society
and environment other thanclimate change, such as
employment or stable provisionof products and services,
through transformation of abusiness model. In such cases, it
is recommended that thefundraiser also takes into

Yes
No
Not Applicable

Confirmed documents:/01//09//10//11//12/
Interviews withstakeholders

Page of 72 of 121

DNV confirmed that there are no additional significant social
or environmental impacts on the implementation of JERA's
Transition Strategy at this time. DNV also confirmed that thenegative environmental/social considerations are potentiallytaken into account for implementation of the projects, JERA
has the process to verify the appropriateness of eachcorrespondence required in subject facilities, installation
countries/regions/communities, in the project evaluation andselection process.

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

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No.

Disclosure elements

Requirement check

Work Undertaken

DNV Findings

Confirmed documents:/01//02//03//04//05//17//18/
Interviews withstakeholders

JERA's transition strategy is built on the transition roadmap
for electricity sector of the METI and the use of TCFD
guidance. JERA developed a transition strategy that is
consistent with the transition roadmap for the electricity
sector, which the energy industry should refer to, and which
identifies criteria, pathways and targets for CO2 emission
reductions.

Confirmed documents:/01//02//03//04//05//17//18/
Interviews withstakeholders

JERA has formulated “JERA Zero CO2 Emissions 2050” and“JERA Zero CO2 Emissions 2050 Roadmap for its Business inJapan (Updated in May 2022)”, with the introduction ofrenewable energy and zero-emission thermal power as key
points in the plan. In order to ensure the implementation ofthis plan, JERA has set “JERA Environmental Target 2030” and“JERA Environmental Target 2035” as the medium-termtarget by 2030, and have drawn up specific transition
strategies and plans. These cover thermal power generation,
which is JERA's core business, and include quantitative
targets, so they are closely related to the management plan
and are judged to be highly effective and credible initiatives.

Confirmed documents:/01//02//03//04//15//16//17//18/

JERA has included a range of technology options in theimplementation of its Transition Strategy. DNV also confirmed
through the assessment that JERA plans to implement

consideration the impact ofbusiness innovations to society
and environment other thanclimate change.
◎
(△)

〇

△

1-d)

1-e)

1-f)

Climate change-related
scenarios11 should be referenced
in developing transition
strategies. The pathway totransition should be planned forrespective sector and regions ofindividual fundraiser, who may
generally be placed in a different
starting point and pathway totransition.

Yes

Transition strategies and plans
must be highly credible in termsof their effectiveness. Therefore,
it is recommended that atransition strategy and plan arelinked to management strategy
and business plan, including
medium-term management
plans.

Yes

However, because suchstrategies and plans run for along period of time, it is possible

Yes

No
Not ApplicableNo
Not ApplicableNo
Not Applicable

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Ref.

No.

Disclosure elements

Requirement checkthat the content may be
modified or adjusted in the eventof a major change in theassumed external environmentand so on.
△

◎

1-g)

1-h)

In the initial phase of developinga transition strategy by thefundraiser, it is considered as an
option for the fundraiser toindicate a plan for future
implementation of items
described with the words“recommended” and “beconsidered/ possible” in these
Guidelines.

Yes

In order to secure theeffectiveness of the transition
strategy, the fundraiser should
establish an organizational
structure12 for the board of
directors and/or other suchcommittee to oversee theactivities addressing climatechange and for management toplay a role in assessing andmanaging such climate-related
activities.

Yes

No
Not ApplicableNo
Not Applicable

Work Undertaken

DNV FindingsInterviews withstakeholders

changes and modifications to the Transition Strategy and Planin a flexible manner in response to revisions to the nationalguidelines.

Confirmed documents:/01/
Confirmation through thisassessment

DNV confirmed that JERA's transition strategy is generally
implemented for the “recommend” and “beconsidered/possible” items in this basic guideline. DNV also
confirmed that there are plans to further consider the content
of the disclosures as the standards, policies and targets arereviewed in the future.

Confirmed documents:/01//02//03//04//05//18/
Interviews withstakeholders

JERA considers all matters relating to transition finance to bematters of management strategy, and implements themunder the following corporate governance structure: JERA considers all matters related to transition finance to be
the management strategy and implements the following
corporate governance system. In order to develop JERA's
business globally in a variety of fields, the Board Director,
which consists of directors who are familiar with thecompany's business and outside board directors with awealth of knowledge and experience, is responsible formaking significant management decisions, and supervisorsof the independent audit company adopt the system for the

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No.

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Requirement check

Work Undertaken

DNV Findings
auditor installation company that implement the audit for
operation status of board directors.
 In order to realize the appropriate and prompt decisionmaking and efficient operation, JERA separates the decisionmaking and supervision of management from the executionof business operation, and has adopted an executive officer
system under which executive officers are responsible forbusiness execution based on decisions made by the Board of
Directors.

Groups and
Branches

Figure Corporate Governance System (Changed in April 2022)△

1-i)

While a transition strategy shallbe basically developed by acompany in need of finance, it ispossible for entities to utilize thestrategy of companies that are
wholly or partially responsible forthe initiatives to establish or
explain their own strategy, giventhat the finance supports GHG
emissions reduction initiatives of

Yes
No
Not Applicable

Confirmed documents:/01//02//03//04//15//16//18/
Interviews withstakeholders

Page of 75 of 121

JERA's transition strategy includes, in addition to its strategy
as an energy company engaged in upstream fuelprocurement, power generation, and wholesale electricity andgas sales, activities to contribute to the reduction of CO2
emissions in Japan and abroad, and in society as a whole,through the provision of technologies, products and services
that contribute to low-carbon demand and decarbonization, in
accordance with national and other policies.

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

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No.

Disclosure elements

Requirement check

Work Undertaken

DNV Findings

Confirmed documents:/01//02//03//04//05//18/
Interviews withstakeholders

JERA's transition strategy (and environmental initiatives ingeneral) is explained and disclosed to stakeholders and the
public in advance through “JERA Zero CO2 Emissions 2050”
and “JERA Zero CO2 Emissions 2050 Roadmap for its Businessin Japan (Updated in May 2022)”, “JERA Environmental Target
2030”, “JERA Environmental Target 2035”, the Integrated
Report, the website and other media.

Confirmed documents:
01//02//03//04//05//18/
Interviews withstakeholders

JERA's transition strategy takes into account the TCFD
recommendations, and its transition strategy is consistent
with the governance of TCFD recommendations. JERA
discloses governance-related items in its integrated report,
website and Framework. Relevant information can be found in1-d), 1-h) and 1-j).

Confirmed documents:/01//02//03//04//05//09//10//11//12//18/
Interviews withstakeholders

DNV confirmed that there are no additional significant social
or environmental impacts on the implementation of JERA's
Transition Strategy at this time. DNV also confirmed that thenegative environmental/social considerations are potentiallytaken into account for implementation of the projects, JERA
has the process to verify the appropriateness of eachcorrespondence required in subject facilities, installation

not just a single company but its
supply chain.
◎

△

〇

1-j)

1-k)

1-l)

Transition strategies should be
disclosed in advance in acompany’s integrated report,sustainability report, statutory
documents and other materials
for investors (including suchdisclosures on the website). This
also applies to the other threeelements.

Yes

It is possible to disclosetransition strategies andelements concerning thegovernance guaranteeing thatthe execution of transition
strategies is in alignment withthe reporting frameworks suchas the Recommendations of the
Task Force on Climate-Related
Financial Disclosures (TCFD;
Final Report)13.

Yes

If the implementation of atransition strategy assumes
impacts on society andenvironment other than climatechange, it is recommended thatthe fundraiser explain the view
underlying its approach14, etc. toYes

No
Not ApplicableNo
Not ApplicableNo
Not Applicable

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No.

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Work Undertaken

address such impacts anddisclose how the strategy on thewhole contributes to achieving
the Sustainable Development
Goals (SDGs) so that the effects
can be appropriately evaluatedby the financier.

DNV Findings
countries/regions/communities, in the project evaluation andselection process. the material issue (materiality) mainly
relevant to the transition finance is to tackle the climatechange, as outlined in JERA's vision, "Global leader in LNG andrenewables, sparking the transition to a clean energy
economy", and the relationship with the SDGs is summarised
as follows:
Reference (in Table-1 of the main text)
Vision: Global leader in LNG and renewables, sparking thetransition to a clean energy economy
Materiality: Environment (Climate change)

Goal 7: Affordable and Clean Energy
Goal12: Responsible Consumption and Production
Goal 13: Climate Action*In May 2022, JERA’s vision was changed to “To scale up its
clean energy platform of renewables and low greenhouse gas
thermal power, sparking sustainable development in Asia andaround the world”◎

1-m)

Considering the length ofapplication and other factors,
there may be instances when atransition strategy and plan willneed to be modified due tomajor changes in the external
environment and relevant
conditions that were assumed at
a planning phase. In this case,

Yes
No
Not Applicable

Confirmed documents:/01//02//03//04//17//18/
Interviews withstakeholders

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JERA has included a range of technology options in theimplementation of its Transition Strategy. DNV also confirmed
through the assessment that JERA plans to implementchanges and modifications to the Transition Strategy and Planin a flexible manner in response to revisions to the nationalguidelines and technology movement.
JERA plans to disclose any material changes to its transition
strategy and plans in a timely manner, together with thereasons for such changes.

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

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No.

Disclosure elements

Requirement check

Work Undertaken

DNV Findings

Confirmed documents:/01//02//03//04//05//18/
Interviews withstakeholders

JERA has established the following organizational structure,and the details are disclosed in JERA Group Corporate
Communication Book 2021(Integrated report).

the contents of the modification
should be disclosed together
with the underlying reason in atimely manner.
〇

1-n)

In terms of governance, it isrecommended that disclosures
include an organizational
structure for overseeing theimplementation of a transition
strategy and for assessing andmanaging related initiatives. It isalso recommended that
disclosures include the specificroles of the constituent
organizations and the
management and the process bywhich the content ofdeliberations is reflected inmanagement.

Yes
No
Not Applicable JERA considers all matters related to transition finance to be
the management strategy and implements the following
corporate governance system. In order to develop JERA's
business globally in a variety of fields, the Board Director,
which consists of directors who are familiar with thecompany's business and outside board directors with awealth of knowledge and experience, is responsible formaking significant management decisions, and supervisorsof the independent audit company adopt the system for theauditor installation company that implement the audit for
operation status of board directors.
 In order to realize the appropriate and prompt decisionmaking and efficient operation, JERA separates the decisionmaking and supervision of management from the executionof business operation, and has adopted an executive officer
system under which executive officers are responsible forbusiness execution based on decisions made by the Board of
Directors.

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Ref.

No.

Disclosure elements

〇

1-o)

In cases where the fundraiser
determines the need for an
objective assessment regarding
the transition strategy, it isrecommended that a review,
assurance and verification by an
external organization for its
transition strategy.

Yes

It is recognized useful to obtaina review particularly concerning
the following in connection withthe transition strategy:- Alignment of short-term, midterm and long-term targets(for targets, refer to Element3) with the overall scenario- Credibility of the fundraiser’s
strategy to reach the targets- Appropriateness of the
management process andgovernance for the transition
strategy

Yes

△

1-p)

Requirement checkNo
Not ApplicableNo
Not Applicable

Work Undertaken

DNV Findings

Confirmed documents:/01//02//03//04//05//15//16//17//18/
Interviews withstakeholders* Confirmation throughthis assessment

JERA uses a review by DNV, an external reviewer, for an
objective assessment of the eligibility of its transition finance,
including its transition strategy.

Confirmed documents:/01//02//03//04//05//15//16//17//18/
Interviews withstakeholders* Confirmation throughthis assessment

DNV has confirmed the following about the review of JERA's
transition strategy:- JERA's Transition Strategy is consistent with thescenarios (specific action plans) and targets shown in thetable below.
- JERA's transition strategy is positioned as an activity torealize“JERA Zero CO2 Emissions 2050 Roadmap for its
Business in Japan (Updated in May 2022)” and its
credibility is judged to be supported by specific plans andtargets as “JERA Environmental Target 2030” and "JERA
Environmental Target 2035".
- The management processes and governance of theTransition Strategy will be properly implemented under
the JERA’s Corporation Governance Structure.

TABLE JERA TRANSITION TARGETS

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DNV Findings
FY 2030
 Reduce carbon emission intensity of thermal power
plants by 20% based on the long-term energy supplydemand outlook for FY 2030 as set by the government.
 Shut down all inefficient (supercritical or less) coal
power plants
 Promote demonstration of mixed combustion withammonia at high-efficiency (ultra-supercritical) power
plantsMEDIUM-TERM
GOALS

 Promote the development of renewable energy canteredon offshore wind power projects
 Work to further improve the efficiency of LNG thermal
power generation
FY 2035
 Reduce CO2 emissions from domestic operations by atleast 60% (relative to FY 2013) by FY 2035.
 Given the expanded adoption of renewable energy
based on the national government’s 2050 carbon
neutral policy, JERA will strive to develop and adopt
renewable energy in Japan Work to reduce carbon emission intensity from thermal
power generation by promoting hydrogen and ammonia
co-firing

LONGTERM

 CO2 zero emissions

GOALS
JERA's roadmap will be refined in stages based on policy and other assumptions.
The roadmap will also be revised if the assumptions change significantly.

9 Transition finance is available for not only entities with strategies and plans for reducing emissions associated with their corporate economic activities, but also
entities that plan to take initiatives that enable others to implement transition strategies through their own products and services. In such cases of financial
institutions, a financier should articulate how the underlying projects or activities themselves fit into the fundraiser’s strategy while, similarly, a subsidiary or an

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SPC to make use of its group’s or its sponsors’ strategy. However, doing so they should explain how their strategy will contribute to the strategy as a whole. In
addition, it can be considered that parent company or the group who established the strategy would explain the transition elements as the main fundraiser.

10 The Paris Agreement sets out a goal to Holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts
to limit the temperature increase to 1.5°C above pre-industrial levels.
11 Climate-related scenarios are listed in the “Task Force on Climate-related Financial Disclosures (TCFD) Technical Supplement” and the document issued by the
Ministry of the Environment: “Practical Guide for Scenario Analysis in line with TCFD Recommendations”. In addition, Principles for Responsible Investment (PRI)
disclose a set of climate scenario tools.
12 Assumes matters provided for under “governance” in the TCFD Recommendations.
13 As for the approach to disclosure aligned with TCFD Recommendations, refer to “Guidance on Climate-related Financial Disclosures (TCFD Guidance) 2.0”,“Guidance for Utilizing Climate-related Information to Promote Green Investment (Green Investment Guidance)” (both published by the TCFD Consortium), andthe document published by the Ministry of the Environment: “Practical Guide for Scenario Analysis in line with TCFD Recommendations”.
14 An example of the approach may be to identify, eliminate, reduce, and manage potential negative effects.

CTF-2 Business Model Environmental Materiality
Ref.

No.

Disclosure elements

◎

2-a)

Initiatives for achieving thetransition strategy should be suchthat contribute to transforming
core business activities that areenvironmentally material parts
today and in the future.15

Requirement
Check

Work Undertaken

DNV Findings

Yes

Confirmed
Documents:/01//02//03//04//0
5//07//09//10//11//12//18/
Interviews withstakeholders

JERA‘s Transition Strategy includes significant reduction goals toachieve to reduce carbon emission intensity of thermal power
plants by 20% based on the long-term energy supply-demand
outlook for FY 2030 as set by the government. The following
measures are incorporated: for coal-fired thermal shutting down
all inefficient (supercritical or less) coal power plants, andpromoting the demonstration of mixed combustion withammonia/hydrogen at high-efficiency (ultra-supercritical) power
plants; for the LNG thermal power generation, further improvethe efficiency of LNG-fired power generation. The transitionNo
Not Applicable

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No.

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Check

Work Undertaken

DNV Findings
strategy includes the following specific measures (see tablebelow)
Table JERA's Main Initiatives to Achieve Carbon Neutrality(Transition Finance and Nominated Projects)
Eligibility

Project Overview (Main Expenditure)

Criteria①

Demonstration study of 20% ammonia cofiring in 1 million kW class coal-fired power
plant

The
expenditures
related todemonstration
projects of fossil
fuels andammonia/hydrogen co-firing- Project period: June 2021 - March 2025
- Project description: Development anddemonstration test of technology to convert
20% of fuel (calorific value ratio) to ammonia
at Hekinan Thermal Power Station Unit 4 (toFY2024)※ NEDO subsidized project "Development ofTechnologies for Carbon Recycling and NextGeneration Thermal Power Generation /Research, Development and Demonstration ofTechnologies for Ammonia Co-Firing Thermal
Power Generation"

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Check

Work Undertaken

DNV Findings②

Demonstration study on actual equipment toestablish technology for high ammonia cofiring rate at commercial thermal power plants- Project period: FY2021 to FY2028- Project description: Development of a newammonia high-efficiency burner and study ofthe specifications of the equipment (to FY2024), and demonstration tests to convert
more than 50% of the fuel (calorific value
ratio) to ammonia at the Hekinan thermal
power station (to FY2028).
※ Adoption of NEDO Green Innovation Fund
Project "Establishment of Fuel Ammonia
Supply Chain Project”③

Demonstration of high co-firing rate atthermal power station using ammonia singlefuel burners- Project period: FY2021 to FY2028- Project description: Development of a newammonia single-fuel burner and study of thespecifications of the equipment (to 2024), andconducting technology development anddemonstration tests to convert more than
50% of the fuel (calorific value ratio) toammonia at two different boiler units (toFY2028).

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No.

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Requirement
Check

Work Undertaken

DNV Findings※ Adoption of NEDO Green Innovation Fund
Project "Establishment of Fuel Ammonia
Supply Chain Project”④

Technical verification of hydrogen co-firing
power generation for the construction of alarge-scale hydrogen supply chain- Project period: October 2021 to March 2026
- Project description: Conducting
demonstration tests at large-scale LNG-fired
power plants in Japan to convert
approximately 30% (by volume) of LNG intohydrogen for power generation (to FY2025).
※ Adoption of NEDO Green Innovation Fundproject for “Construction of a large-scalehydrogen supply chain”

The⑤

expenditures

Demolition of existing power generation
facilities at Goi Thermal Power Station (LNG)

related todecommissionsof inefficient
thermal power
plants, with theaim ofreplacement for
high-efficiency
thermal power
plantsPage of 84 of 121⑥

Demolition of existing power generation
facilities at Chita Thermal Power Station (LNG)(Demolition plan is in preparation)

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

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No.

Disclosure elements

〇

2-b)

△

◎

2-c)

2-d)

Requirement
Check

Work Undertaken

DNV Findings

When identifying businessactivities that are environmentallymaterial parts, it is recommended
that the fundraiser consider
multiple climate change-related
scenarios that may possibly
impact its judgment on theidentification16.

Yes

Confirmed
documents:/01//02//03//04//05//18/
Interviews withstakeholders

JERA discloses climate change-related information in line with therecommendations of the TCFD. Specifically, JERA discloses
information on governance, strategy (analysing risks andopportunities for “Average temperature below 2°C scenarios” and"4°C or more scenarios", including the period from the medium
term to 2030 and the long term to 2050 for analysing period),
risk management ("Management for integrated risks classified to"Operation risk", "Market risks", “Credit risks") and indicators andtargets. JERA's Transition Strategy is linked to this TCFD
initiative.

In terms of considering
materiality, it is possible to apply
existing guidance provided by anorganization that creates standard
criteria concerning sustainability
reporting17.

Yes

Confirmed
documents:/01//02//03//04//05//18/
Interviews withstakeholders

In identifying materiality, JERA has used analysis and evaluation
methods using GRI standard*1, ISO 26000, TCFD, etc. In
addition, efforts to address environmental materiality include not
only the reduction of emissions from the company's own businessactivities, but also activities that contribute to the reduction of thescope3 and other companies. Furthermore, the contribution to
the SDGs is also taken into account, and these are disclosed in
the Framework and other documents.
*1: Global Reporting Initiative (an international standard
providing ESG-related reporting, management and analysis
methods)

The fundraiser should indicatethat climate change is anenvironmentally material part ofbusiness activities18.

Yes

Confirmed
documents:/01//02//03//04//05//18/
Interviews withstakeholders

One of the materialities defined for JERA, “Environment (climatechange)” is closely linked to “Global leader in LNG and renewableenergy leading to the clean energy economy" which is the JERA’s
vision. These are disclosed in the integrated report and on thewebsite.
*In May 2022, JERA’s vision was changed to “To scale up its
clean energy platform of renewables and low greenhouse gas

No
Not ApplicableNo
Not ApplicableNo
Not Applicable

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Check

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DNV Findings
thermal power, sparking sustainable development in Asia andaround the world”

〇

2-e)

It is recommended that
disclosures include the contents ofclimate change-related scenarios
used in identifying businessactivities that are environmentallymaterial parts along with theunderlying reasons (e.g., regional
and industrial characteristics) for
selecting such scenarios.

Yes
No
Not Applicable

Confirmed
documents:/01//02//03//04//05//18/
Interviews withstakeholders

JERA recognizes that the TCFD recommendations and the efforts
to join the TCFD consortium are appropriate scenario analyses inorder to provide effective corporate disclosure on climate change
responses and to help financial institutions and others makeappropriate investment decisions. These are disclosed in the
integrated report and on the website.

15 They include activities that are environmentally material parts are considered to be business activities of the fundraiser that identifies climate change as part ofits materiality.
16 Scenario analysis using multiple climate-related scenarios is similar to that required by the TCFD Recommendations, and it is considered useful to refer torelevant guidelines and such like for implementation methods. An example is the document issued by the Ministry of the Environment: “Practical Guide for
Scenario Analysis in line with TCFD Recommendations”.
17 “The SASB Materiality Map” issued by the Sustainability Accounting Standards Board serves as a guidance concerning materiality.
18 As for the approach to identifying environmentally material business activities, it is possible to use the materiality map and such like and outline the level ofmateriality of climate change for one’s entity.

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CTF-3 Climate Transition Strategy to be Science-based Including Targets and Pathways
Ref.

No.

Disclosure elements

Requirement
Check

Work Undertaken

DNV Findings

◎

3-a)

The fundraiser shouldreference science-basedtargets in developing its
transition strategies.

Yes

Confirmed
documents:/01//02//03//04/
/05/
/18/
Interviews withstakeholders

JERA's transition strategy and targets are in line with thetransition roadmap for electricity sector of the METI, which aims
to align with the goals of the Paris Agreement. The transition
roadmap for the electricity sector of METI is based on thescientific-based required to achieve the goals of the Paris
Agreement, and therefore JERA's Transition Strategy is
considered to be a science-based goal.

This should include mid-termtargets (short- to mid-termtargets) in addition to longterm targets for 2050 and bequantitatively measurable
based on a measurement
methodology which isconsistent over a long periodof time.

Yes

Confirmed
documents:/01//02//03//04/
/05/
/18/
Interviews withstakeholders

JERA has developed its Transition Strategy as “JERA Zero CO2Emissions 2050”, “JERA Zero CO2 Emissions 2050 Roadmap for
its Business in Japan (Updated in May 2022)” and “JERA
Environmental Target 2030” and "JERA Environmental Target
2035", which set CO2 zero emissions by 2050 and its mediumterm goals by 2030 and 2035. Moreover, the strategic andspecific plans for decarbonization (a plan to introduce
technologies that contribute to transition) is also incorporated.
Each goal based on JERA's Transition Strategy is disclosed asfollows.

◎

3-b)

No
Not ApplicableNo
Not Applicable

TABLE JERA TRANSITION TARGETS
FY 2030
 Reduce carbon emission intensity of thermal
power plants by 20% based on the long-term
MEDIUMTERM
GOALS

energy supply-demand outlook for FY 2030 as
set by the government.
 Shut down all inefficient (supercritical or less)coal power plants
 Promote demonstration of mixed combustion
with ammonia at high-efficiency (ultrasupercritical) power plants

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Check

Work Undertaken

DNV Findings

 Promote the development of renewable energy
cantered on offshore wind power projects
 Work to further improve the efficiency of LNG
thermal power generation

FY 2035
 Reduce CO2 emissions from domestic operations
by at least 60% (relative to FY 2013) by FY
2035.
 Given the expanded adoption of renewableenergy based on the national government’s
2050 carbon neutral policy, JERA will strive todevelop and adopt renewable energy in Japan Work to reduce carbon emission intensity fromthermal power generation by promotinghydrogen and ammonia co-firing
LONG-TERM
GOALS CO2 zero emissions

JERA's roadmap will be refined in stages based on policy and otherassumptions. The roadmap will also be revised if the assumptions
change significantly.

◎

(△)

3-c)

In addition, it isrecommended that GHG
reduction targets, which could
be formulated either inintensity and absolute terms,
should consider environmental
materiality and cover Scopes

Yes
No
Not Applicable

Confirmed
documents:/01//02//03//04//05//18/
Interviews withstakeholders
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JERA's emissions reductions are assessed on a per-unit basis in
Scope 1. Scope 3 emissions from JERA's business activities aremeasured and disclosed to the extent practicable, but noreduction targets have been set because the ratio is small
compared to Scope 1.

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

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No.

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Check

Work Undertaken

DNV Findings

Yes

Confirmed
documents:/01//02//03//04//05//17//18/

JERA's transition strategy targets refer to the following:

1 through 3 of GHG Protocol,
the international standard on
supply-chain emissions. It is
recommended that targets
covering Scope 3 be set usinga practical calculation method
when it could be subject tosignificant reduction in thefundraiser’s business model19.
It is also possible to disclose
the avoided emissions asnecessary.
◎
(△)

3-d)

Science-based targets are
GHG reduction targets
required for achieving thegoals of the Paris Agreement
and should be set while taking
into account differences inregional characteristics andindustries. In so doing, it ispossible to refer to thefollowing trajectories.
- Scenarios widely
recognized in theinternational community(Examples include theSustainable Development
Scenario (SDS) outlinedby the International
Energy Agency (IEA)20)No
Not Applicable-

A widely recognized international scenario⇒For scenario analysis responding to TCFD, refer to IEA's
analysis, " SDS：Sustainable Development Scenario","STEPS：Stated Policies Scenario" and "SSP1-1.9, SSP12.6" and "SSP3-7.0, SSP5-8.5" in the IPCC Sixth
Assessment Report, Working Group I.

-

JERA's roadmap and targets, such as the Science Based
Targets Initiative (SBTi), have not been verified, but thedealing validity of the plan has been confirmed throughassessment.

-

Targets consistent with the Paris Agreement targets (e.g.
NDC, roadmaps by sector, scientific evidence set byindustry etc.)

Interviews withstakeholders

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Check

Work Undertaken- Objectives verified
under the Science Based
Targets Initiative (SBTi)and such like- Nationally Determined
Contributions (NDC) of
countries aligned withthe goals of the Paris
Agreement, roadmaps byindustry sector21,
industries set out plansthat are science-basedachieving the Paris
Agreement22 and so on.
◎

△

3-e)

3-f)

DNV Findings⇒See the transition roadmap for the electricity sector of
METI.

Short- to mid-term targets(with a term of three tofifteen years) should be set byreferencing the aforesaid
trajectories or on the pathway
toward the long-term targets
planned as benchmarks23.

Yes

In doing so, since short- to
mid-term targets will likely be
set in consideration of various
factors (including the starting
point and track records of theissuer, timing of capital
investments, economic
rationality, cost-benefit

Yes

No
Not Applicable

Confirmed
documents:/01//02//03//04//17//18/
Interviews withstakeholders

No
Not Applicable

Confirmed
documents:/01//02//03//04//17//18/
Interviews withstakeholders

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JERA's medium-term targets (year of 2030) are based on theasset deployment and technology development plans set out inthe pathway (transition roadmap) towards the long-term targetof 2050.
*See 3-b) for details.

In developing the roadmap, JERA has taken into account a
range of issues (short term initiatives, medium- and long-term
technology development and implementation) and plans toachieve its targets through multiple technology options. JERA
recognizes that shutting down all inefficient (supercritical orless) coal power plants, further improvement of the efficiency of
LNG thermal power generation and introduction of renewableenergy are material, regarding the CO2 emission reduction until

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

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No.

Disclosure elements

Requirement
Check

Work Undertaken

analysis, and availability oftechnology necessary toachieve the targets), it ispossible that the pathway
may not necessarily be linearwith the same slope at all
times but may be nonlinear.

DNV Findings
the establishment of technology for realization of decarbonizedsociety. Therefore, the goals toward 2030 are set considering
above. JERA is planning a non-linear pathway towards CO2 zero
emissions in 2050.

JERA Decarbonization Strategy◎

3-g)

The fundraiser should disclose
the short- to mid-term andlong-term targets they haveset, including the base years
etc.

Yes
No
Not Applicable

Confirmed
documents:/01//02//03//04//18/
Interviews withstakeholders

Page of 91 of 121

JERA's Transition Strategy sets out the following medium-termgoals by 2030:
 Reduce carbon emission intensity of thermal power plants by
20% based on the long-term energy supply-demand outlook
for FY 2030 as set by the government.
 Shut down all inefficient (supercritical or less) coal power
plants Promoting demonstration of mixed combustion with ammonia
at high-efficiency (ultra-supercritical) power plants
 Promoting the development of renewable energy cantered on
offshore wind power projects
 Further improvement of the efficiency of LNG thermal power
generation

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Ref.

No.

Disclosure elements

Requirement
Check

Work Undertaken

DNV Findings
JERA's Transition Strategy sets out the following medium-termgoals by 2035:
 Reduce CO2 emissions from domestic operations by at least
60% (relative to FY 2013) by FY 2035
 Given the expanded adoption of renewable energy based on
the national government’s 2050 carbon neutral policy, JERA
will strive to develop and adopt renewable energy in Japan Work to reduce carbon emission intensity from thermal
power generation by promoting hydrogen and ammonia cofiring
JERA has also set long-term goals of CO2 zero emissions by
2050. These are disclosed in “JERA Zero CO2 Emissions 2050
Roadmap for its Business in Japan (Updated in May 2022)”.

◎

3-h)

In order to show that longterm targets are sciencebased, disclosures should
explain the methodology or
trajectory used to definetarget, including theunderlying reasons (e.g.,characteristics specific to aregion or industry). In
particular, when reference ismade to plans and industry
roadmaps established by anindustry, etc., the explanation
should include that they are
grounded in scientific basis.

Yes
No
Not Applicable

Confirmed
documents:/01//02//03//04//17//18/
Interviews withstakeholders

Page of 92 of 121

The long-term targets and efforts in JERA's Transition Strategy
are consistent with those of the transition roadmap for theelectricity sector of METI. The transition roadmap for theelectricity sector of METI refers various Japanese policies andinternational scenarios aimed at achieving carbon neutrality in
2050, and are clearly consistent with the Paris Agreement.

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Ref.

No.

Disclosure elements

△

3-i)

It is possible that disclosuresexplain the pathway toward along-term target and thealignment between the shortto mid-term targets on thepathway and the transition
strategy, based on theinvestment plan (refer toElement 4) and other plans.

Requirement
Check

Work Undertaken

DNV Findings

Yes

Confirmed
documents:/01//02//03//04//09//10//11//12/
Interviews withstakeholders

JERA has set forth the following specific initiatives as examplesof typical projects (eligible project categories) that may be
eligible for investment among the initiatives toward the longterm goals.

No
Not Applicable

Table JERA's Main Initiatives to Achieve Carbon Neutrality(Transition Finance and Nominated Projects)
Eligibility

Project Overview (Main Expenditure)

Criteria①

Demonstration study of 20% ammonia cofiring in 1 million kW class coal-fired power
plant

The
expenditures
related todemonstration
projects of fossil
fuels andammonia/hydrogen co-firing- Project period: June 2021 - March 2025
- Project description: Development anddemonstration test of technology to convert
20% of fuel (calorific value ratio) to ammonia
at Hekinan Thermal Power Station Unit 4 (toFY2024)※ NEDO subsidized project "Development ofTechnologies for Carbon Recycling and NextGeneration Thermal Power Generation /Research, Development and Demonstration ofTechnologies for Ammonia Co-Firing Thermal
Power Generation"

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Ref.

No.

Disclosure elements

Requirement
Check

Work Undertaken

DNV Findings②

Demonstration study on actual equipment toestablish technology for high ammonia cofiring rate at commercial thermal power plants- Project period: FY2021 to FY2028- Project description: Development of a newammonia high-efficiency burner and study ofthe specifications of the equipment (to FY2024), and demonstration tests to convert
more than 50% of the fuel (calorific value
ratio) to ammonia at the Hekinan thermal
power station (to FY2028).
※ Adoption of NEDO Green Innovation Fund
Project "Establishment of Fuel Ammonia
Supply Chain Project”③

Demonstration of high co-firing rate atthermal power station using ammonia singlefuel burners- Project period: FY2021 to FY2028- Project description: Development of a newammonia single-fuel burner and study of thespecifications of the equipment (to 2024), andconducting technology development anddemonstration tests to convert more than
50% of the fuel (calorific value ratio) toammonia at two different boiler units (toFY2028).

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Ref.

No.

Disclosure elements

Requirement
Check

Work Undertaken

DNV Findings※ Adoption of NEDO Green Innovation Fund
Project "Establishment of Fuel Ammonia
Supply Chain Project”④

Technical verification of hydrogen co-firing
power generation for the construction of alarge-scale hydrogen supply chain- Project period: October 2021 to March 2026
- Project description: Conducting
demonstration tests at large-scale LNG-fired
power plants in Japan to convert
approximately 30% (by volume) of LNG intohydrogen for power generation (to FY2025).
※ Adoption of NEDO Green Innovation Fundproject for “Construction of a large-scalehydrogen supply chain”

The⑤

expenditures

Demolition of existing power generation
facilities at Goi Thermal Power Station (LNG)

related todecommissionsof inefficient
thermal power
plants, with theaim ofreplacement for
high-efficiency
thermal power
plantsPage of 95 of 121⑥

Demolition of existing power generation
facilities at Chita Thermal Power Station (LNG)(Demolition plan is in preparation)

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Ref.

No.

Disclosure elements

△

3-j)

Concerning targets andtrajectories, obtaining expert
reviews on the following is
considered to be particularly
useful:- Whether the long-termtarget is aligned with sciencebased targets➡Whether the disclosed
information explains thealignment with the Paris
Agreement- Whether the short- to midterm targets are determinedusing a GHG emissions
forecast calculated based ona climate change scenario
analysis➡Whether scenarios, etc.
widely recognized in theinternational community areused or referenced- Whether the actual valuesof the indicators used forthe targets arequantitatively measured
using consistentmeasurement methods➡Whether a specific GHG
emissions reduction
measure has been

Requirement
Check

Work Undertaken

DNV Findings

Yes

Confirmed
documents:/01//02//03//04//17//18/
Interviews withstakeholders

Based on the documentation and information provided by JERA,DNV has reviewed the following and confirmed that JERA’s
targets and trajectories are science-based.
Whether the long-term target is aligned with science-basedtargets➢ The targets and trajectory based on JERA's transition
strategy refers various Japanese policies and international
scenarios aimed at achieving carbon neutrality in 2050,
which is incorporated into the transition roadmap for theelectricity sector of METI. In addition, the transition
roadmap for the electricity sector of METI is clearlyconsistent with the Paris Agreement.

No
Not Applicable*Confirmation
through thisassessment--

Page of 96 of 121

Whether the short- and medium-term targets are based on
climate change scenario analysis and greenhouse gas
calculation forecast➢ Based on the IEA and IPCC scenarios, JERA conducts
scenario analysis respectively for 2030 and 2050 for below
2°C and 4°C or more (assessment of risks andopportunities by scenario). This is closely related to JERA's
efforts on greenhouse gas emissions and climate change.
Whether the actual values of emission intensity indicators
used for the targets are quantitatively measured using
consistent measurement methods➢ The actual value for the indicator adopted for the targets
is the emission intensity. JERA has defined the methods tocalculate and evaluate the reduction effects based on theamount of CO2 emission and power energy in Scope 1.
Through the review, DNV confirmed that the CO2 reduction
effect is estimated based on the above actual value.

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Ref.

No.

Disclosure elements

Requirement
Check

Work Undertaken

DNV Findings

developed to achieve
short- to mid-termtargets aligned with longterm goals

With difficulty of calculation of the direct CO2 reduction
benefits for some projects, the reduction effect will be
disclosed by releasing the project progress, plans, etc.

19 Since an appropriate method for calculating Scope 3 emissions for specific industrial sectors is under development, it is possible to estimate Scope 3 emissions
on a provisional “best effort” basis. When disclosing, it is recommended that boundaries, calculation methods and other relevant factors be also reported. “Basic
Guidelines on Accounting for Greenhouse Gas Emissions Throughout the Supply Chain” (METI, MoE; 2017 Japanese only. Related information in English) can beused for calculation references.
20 In addition to benchmarks indicated by the IEA, there are those referenced by the IPCC, such as RCP 2.6 (keep global warming to below 2°C), RCP 1.9 (keepglobal warming to below 1.5°C) and other related Transition Pathway Initiative (TPI) benchmarks. Meanwhile, scenario listings are available in the TCFD
Technical Supplement and in the document published by the Ministry of the Environment: “Practical Guide for Scenario Analysis in line with TCFD
Recommendations”.
21 An example of a sector-specific roadmap formulated by a public organization is the “Roadmap to Zero Emission from International Shipping” (Ministry of Land,
Infrastructure, Transport and Tourism; 2020). The Ministry of International Trade and Industry also plans to formulate a roadmap for high emission industries.
22 In utilizing a plan formulated at a sector level, it is necessary to have a credible proposition that the alignment with the Paris Agreement can be explained with
scientific grounds.
23 While it is possible to set short- to mid-term targets by determining the standard based on an assumed use of best available technologies (BAT), consideration
should be made as to whether the use of such technologies might make it difficult to achieve long-term targets.

CTF-4 Implementation Transparency
Ref.

No.

Disclosure elements

◎

4-a)

In implementing transition strategies, thefundraiser should provide transparency ofthe basic investment plan to the extent

Requirement
Check
Yes
No

Work Undertaken

DNV Findings

Confirmed
documents:

DNV confirmed that the investment and business plans
related to JERA transition strategy included agreement
on investments that has been implemented andPage of 97 of 121

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Ref.

◯

No.

4-b)

Disclosure elements

Requirement
Check

Work Undertaken

DNV Findings

practicable.

Not Applicable/01//02//03//04//07//18/
Interviews withstakeholders

investments and expenditure in the future. DNV also
confirmed that overall investment plan (investment
amount) will be executed in accordance with thetimeline. DNV confirmed that JERA plans to consider thedisclosure of its basic investment plan (investment
amount) with a view to ensuring transparency to theextent possible.
In addition, DNV reviewed the Framework and the efforts
to ESG management of JERA and found the hightransparency in the implementation. DNV also confirmedthat the explanation and agreement for appropriatenessof execution has been provided by JERA.

The investment plan includes not only
capital expenditure (Capex) but also
capital and operational expenditure(Opex). Therefore, costs related toresearch and development, M&A, anddismantling and removal of facilities arealso subject to the investment plan. In
other words, it is recommended that theinvestment plan incorporate, to the extent
possible, expenditure and investment
necessary for implementing the transition
strategy.

Yes

Confirmed
documents:/01//02//03//04//07//09//10//11//12//18/
Interviews withstakeholders

The investment plan includes one or more of thefollowing capitals, operational and running costs
necessary to implement the following strategies that
contribute to the necessary efforts to implement theTransition Strategy.

No
Not Applicable

Eligibility Criteria
1)

The expenditures
related todemonstration projects

The specific efforts (Project overview and main
expenditure) are listed in the below table.

Project Overview①

Demonstration study of 20% ammonia co-firing in 1 million kW class coal-fired power plant- Project period: June 2021 - March 2025

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Ref.

No.

Disclosure elements

Requirement
Checkof fossil fuels andammonia/hydrogenco-firingWork Undertaken

DNV Findings- Project description: Development and demonstration test of technology to convert 20% of fuel (calorific value ratio) to ammonia
at Hekinan Thermal Power Station Unit 4 (to FY2024)※ NEDO subsidized project "Development of Technologies for Carbon Recycling and Next-Generation Thermal Power Generation /Research, Development and Demonstration of Technologies for Ammonia Co-Firing Thermal Power Generation"②

Demonstration study on actual equipment to establish technology for high ammonia co-firing rate at commercial thermal power
plants- Project period: FY2021 to FY2028- Project description: Development of a new ammonia high-efficiency burner and study of the specifications of the equipment (toFY 2024), and demonstration tests to convert more than 50% of the fuel (calorific value ratio) to ammonia at the Hekinan
thermal power station (to FY2028).

※ Adoption of NEDO Green Innovation Fund Project "Establishment of Fuel Ammonia Supply Chain Project”③

Demonstration of high co-firing rate at thermal power station using ammonia single-fuel burners- Project period: FY2021 to FY2028- Project description: Development of a new ammonia single-fuel burner and study of the specifications of the equipment (to2024), and conducting technology development and demonstration tests to convert more than 50% of the fuel (calorific value
ratio) to ammonia at two different boiler units (to FY2028).

※ Adoption of NEDO Green Innovation Fund Project "Establishment of Fuel Ammonia Supply Chain Project”④

Technical verification of hydrogen co-firing power generation for the construction of a large-scale hydrogen supply chain- Project period: October 2021 to March 2026
- Project description: Conducting demonstration tests at large-scale LNG-fired power plants in Japan to convert approximately
30% (by volume) of LNG into hydrogen for power generation (to FY2025).

2)

The expenditures
related todecommissions ofinefficient thermal
power plants, with

※ Adoption of NEDO Green Innovation Fund project for “Construction of a large-scale hydrogen supply chain”⑤

Demolition of existing power generation facilities at Goi Thermal Power Station (LNG)⑥

Demolition of existing power generation facilities at Chita Thermal Power Station (LNG)(Demolition plan is in preparation)

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JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Ref.

No.

Disclosure elements

Requirement
Check

Work Undertaken

DNV Findings

It is recommended that the investment
plan outline the assumed climate-related
outcomes and impacts24 in a quantitative
fashion where possible, along with thecalculation methods and prerequisites25. If
quantification is difficult, the use of
external certification systems can beconsidered as a substitute for qualitative
assessment.

Yes

Confirmed
documents:/01//02//03//04//07//09//10//11//12//18/
Interviews withstakeholders

The climate-related outcomes and impacts assumed by
the investment plan are the reduction by conducting"Co-firing demonstration of fossil fuels withammonia/hydrogen" and "The decommissioning ofexisting inefficient thermal power stations with a viewto rebuilding them with high-efficiency thermal power
stations" which is the eligible criteria shown in 4-b). "The decommissioning of existing inefficient thermal
power stations with a view to rebuilding them withhigh-efficiency thermal power stations" sets the CO2
reduction amount as the index. Meanwhile, "Co-firingdemonstration of fossil fuels with ammonia/hydrogen"sets the progress status of demonstration test as theindex. Through the assessment, DNV confirmed that
JERA has established calculation methods andprerequisites for eligible criteria or each project
category as appropriate. However, JERA will notdisclose those to the public if the business strategy andcustomer information are included, and DNV confirmed
the appropriatenes of that.

In particular, when outlining the assumed
climate-related outcomes and impacts, it isrecommended that the disclosure include
not only GHG emission reduction and otherinitiatives to ease climate change but also

Yes

Confirmed
documents:/01//02//03//04//07//09//10//11//12//18/

Any critical factors that would impede a "just transition"
through the implementation of JERA's Transition
Strategy have not identified. Regarding the utilization of
CO2-free LNG, DNV considers that the influence on thebusiness or employment related to mining LNG will

the aim ofreplacement for
high-efficiency
thermal power
plants

△

◯

4-c)

4-d)

No
Not ApplicableNo
Not Applicable

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JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Ref.

No.

Disclosure elements

Requirement
Checkreport how consideration of a “justtransition”26 is incorporated into thetransition strategy.

〇

◎

4-e)

4-f)

If implementing the transition strategy has
the potential of having a negative impact
on employment or the environment andcommunities other than climate change, it
is recommended that any expenditures tomitigate such negative impacts be added
to the plan.

Yes

Moreover, the outcomes arising frominvestments included in the investment
plan should align with the targets.

Yes

No
Not ApplicableNo
Not Applicable

Work Undertaken

DNV FindingsInterviews withstakeholders

remain in the medium-to-long-term. However, in theprocess transiting to low carbonized/decarbonized andglobal society, it is considered that the abovementioned will not be the disturbing factor for "Justtransition" by reviewing the use of existing supply chain
and plans of existing business. In addition, through theassessment, it was confirmed that JERA will takeappropriate measures and disclose information, whennecessary, if any negative impacts on "Just transition"or SDGs are considered in future projects to be
implemented by JERA.

Confirmed
documents:/01//02//03//04//07//09//10//11//12//18/
Interviews withstakeholders

DNV confirmed that there are no additional significant
social or environmental impacts on the implementationof JERA's Transition Strategy at this time. However, forthe eligibility assessment of each project, JERA will
confirm the negative environmental/social impacts arepotentially taken into account, and the procedures forfacility certification, approval and license andenvironmental assessment required in the countries,
regions and communities where the project is to be
implemented are appropriate.

Confirmed
documents:/01//02//03//04//07//09//10//11//12//18/
Interviews withstakeholders

JERA quantitatively evaluates the results (reduction
effects of CO2 emission intensity) of each eligible
project candidate (see (2-a)) included in the investment
plan are consistent with the targets (see (3-b)).

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JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Ref.

No.

Disclosure elements

〇

4-g)

(△)

◯

◯

4-h)

4-i)

Requirement
Check

Work Undertaken

DNV Findings

Transition finance is a means to financially
support the implementation of a transition
strategy, and it is recommended that
financing be provided for new initiatives.
However, in the case of transition financein the format of Use of Proceeds
instruments, refinancing for a reasonably
set lookback period (the period during
which refinancing is to be applied for
projects that have already started) is
considered to be eligible.

Yes

Confirmed
documents:/01//02//03//04//07//09//10//11//12//18/
Interviews withstakeholders

JERA plans to allocate its transition finance to fund both
new initiatives and refinancing of existing ones
(amounts and ratio are expected to vary for eachproject and bond).
Where refinancing is targeted, DNV confirmed that areasonable look-back period should be set (e.g. thetransitional nature of the target asset should bemaintained at the time of refinancing and theenvironmental improvement benefits should be realised
during the redemption).

It is recommended that investment plans
be disclosed by linking the outcomes andimpacts with the expenditures to theextent practicable27.

Yes

Confirmed
documents:/01//02//03//04//07//09//10//11//12//18/
Interviews withstakeholders

DNV confirmed that the investment and business plans
related to JERA transition strategy included agreement
on investments that has been implemented andinvestments and expenditure in the future. DNV also
confirmed that overall investment plan (investment
amount) will be executed in accordance with thetimeline. DNV reviewed the Framework and the efforts
to ESG management of JERA and found the hightransparency in the implementation. Moreover, theexplanation and agreement for appropriateness of
execution has been provided by JERA.

It is recommended that the fundraiser,
after securing financing, reports any
deviations between the initial plan and theactual expenditure, outcomes and impacts.

Yes

Confirmed
documents:/01//02//03//04//07//09//10//11//12//18/
Interviews withstakeholders

JERA will include in its post-funding reporting any
significant variances in expenditure, outcomes or
impacts from the original plan, as well as the reasonsfor such variances.

No
Not ApplicableNo
Not ApplicableNo
Not Applicable

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JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Ref.

No.

Disclosure elements

Requirement
Check

Work Undertaken

DNV Findings

Confirmed
documents:/01/
Interviews withstakeholders

JERA has set a look-back period of three years. This is astandardised period of time during which JERA's
transition projects are likely to remain transitional in the
short term. DNV confirmed that JERA will explain thereasons for the refinance at an appropriate time (e.g. inlegal documents or reports prior to the bond issue) if
necessary, after JERA confirms that transitional subject
assets are maintained, and the environmental benefits
appears during the redemption period, in the event ofrefinancing.

Confirmed
documents:/01/
Interviews withstakeholders*This report

JERA will not be financed by the execution of loans.

For any deviations, it is recommended thatthe underlying reasons be explained.
◎

◯

(△)

4-j)

4-k)

In cases where the Use of Proceeds bonds
include refinancing, the fundraiser should
provide an explanation on the lookback
period set under the framework or otherrelevant methods along with theunderlying reasons and factors.

Yes

While there are differences in businesspractices, such as the fact that loans are
traditionally made based on the bilateralrelationship between a borrower and alender, it is recommended that disclosureon the above be made to the extent
possible in order to ensure transparency
and credibility of transition finance.
However, if it is difficult to disclose suchinformation to the public from thestandpoint of confidentiality andcompetition, it is possible to report suchinformation only to lenders or external
evaluation organizations without disclosing
it to the public.

Yes

No
Not ApplicableNo
Not Applicable

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JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Ref.

No.

Disclosure elements

△

4-l)

Similarly, in cases where the fundraiser isa small-to-medium-sized enterprise and it
is difficult to disclose to the public thesame content as that reported to thefinancier or an external evaluation
institution, it is possible for the fundraiser
to simplify the content of disclosure, forexample, by limiting disclosure to asummary of h) to j) of this section.

Requirement
Check
Yes
No

Work Undertaken

DNV FindingsInterviews withstakeholders

JERA is not a small business.

Not Applicable

24 The Ministry of the Environment, in its “Concept Paper on Impact Finance”, refers to impact as “a positive or negative change to the environment, society or
economy caused by an organization and is not a direct deliverable or output but an outcome as a change brought about in terms of the environment, society or
economy.”25 In disclosing impacts, outlining the amount of contribution to reducing CO2 emissions in the global value chain on the whole and the entire lifecycle, including theconsumption phase, can be considered. For the amount of contribution to the reduction, it is possible to reference the “Guideline for Quantifying GHG Emission
Reduction Contribution” (METI, 2018). Furthermore, as for outcomes on research and development, it is possible to reference the IEA Measuring Innovation by
Technology Readiness Level (TRL) or Importance for Net-Zero Emission, among others, and outline the progress in the R&D phase or the potential of reducing
CO2 emissions with the relevant technology by highlighting the importance of net-zero emissions.
26 A just transition is an attempt to ensure the wide sharing of virtual profits created through a transition to a green economy, as well as to support any party who
will experience an adverse economic impact (be it a country, a region, an industry, a community, a worker, or a consumer). The concept of a just transition
corresponds to several SDGs.
27 In particular, disclosure of investment plans is expected to be required for projects applicable to Use of Proceeds.

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JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Schedule-5 Green Bond Guidelines (Transition Finance with specific use of proceeds) Eligibility
Assessment
Following check list (GBGLs-1 ~ GBGLs-4) is prepared based on the Green Bond Guidelines (GBGLs, MOE, 2020).
According to the GBGLs, Requirements/Work Undertaken are divided into following two terms, Should:◎ Recommend:〇
The numbers /01/, /02/ ~ /20/ listed in the Work Undertaken column are the confirmed documents, and the details (document name) are shown in Appendix.
In addition to the confirmed documents, the Work Undertaken includes the case where the information obtained through discussions and interviews with the
publishers is used as evidence.
This assessment applies as a requirement for Use of Proceeds based on CTFH and CTFBG, so any term "green" and “bond” in Schedule-5 should beread as "transition” or “finance (bond)".

GBGLs-1 Use of proceeds
Ref.

SectionRequirements◎

1-①

Green Bond proceeds shouldbe allocated to Green Projects
that state the clear
environmental benefits, whichshould be assessed by theissuerYes

Environmental benefit ofGreen Bond proceeds, where
feasible, quantification isrecommended.

Yes

〇

1-①

Requirement checkNo
Not ApplicableNo
Not Applicable

Work Undertaken

DNV Findings

Confirmed
documents:/01//02//03//04//07//09//10//11//12//18/
Interviews withstakeholders

The proceeds from transition finance will be allocated to JERA’s
projects that contribute to low and decarbonization through thebusiness related to environment (climate change), which is amateriality issue for JERA. Specific environmental benefits havebeen evaluated by the issuer as leading to a CO2 reduction.

Confirmed
documents:/01//07//09//10//11//12/Interviews withstakeholders

JERA will report on the project outline and progress within thescope of confidentiality, to the extent practicable, and taking
into account the characteristics of the project.

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Ref.

SectionRequirements◎

1-④

In advance, issuers should
provide investors withinformation regarding the useof Green Bond proceeds
through legal documentation(such as a prospectus) orother documents.

Yes

The provision of theinformation regarding the useof proceeds should specify theGreen Project categories.

Yes

◎

1-⑤

Requirement checkNo
Not ApplicableNo
Not Applicable

Work Undertaken

DNV Findings

Confirmed
documents:/01//07//09//10//11//12//14/
Interviews withstakeholders

JERA plans to explain the use of proceeds to investors inadvance through the Framework and the Amended Shelf
Registration Statement, etc.

Confirmed
documents:/01//07//09//10//11//12//14/This report
Interviews withstakeholders

The proceeds will be allocated to one or more of the following
projects, which will be explained to investors through the
Framework, the Amended Shelf Registration Statement andother documents and the results of external reviews.
Table JERA's Main Initiatives to Achieve Carbon Neutrality(Transition Finance and Nominated Projects)
Eligibility

Project Overview (Main Expenditure)

Criteria①

Demonstration study of 20% ammonia cofiring in 1 million kW class coal-fired power
plant

The
expenditures
related todemonstration
projects offossil fuels and- Project period: June 2021 - March 2025
- Project description: Development anddemonstration test of technology to convert
20% of fuel (calorific value ratio) toammonia at Hekinan Thermal Power Station

ammonia/hydroUnit 4 (to FY2024)

gen co-firing※ NEDO subsidized project "Development ofTechnologies for Carbon Recycling and NextGeneration Thermal Power Generation /Research, Development and Demonstration

Page of 106 of 121

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Ref.

SectionRequirements

Requirement check

Work Undertaken

DNV Findingsof Technologies for Ammonia Co-Firing
Thermal Power Generation"②

Demonstration study on actual equipment toestablish technology for high ammonia cofiring rate at commercial thermal power
plants- Project period: FY2021 to FY2028- Project description: Development of a newammonia high-efficiency burner and study ofthe specifications of the equipment (to FY2024), and demonstration tests to convert
more than 50% of the fuel (calorific value
ratio) to ammonia at the Hekinan thermal
power station (to FY2028).
※ Adoption of NEDO Green Innovation Fund
Project "Establishment of Fuel Ammonia
Supply Chain Project”③

Demonstration of high co-firing rate atthermal power station using ammonia
single-fuel burners- Project period: FY2021 to FY2028- Project description: Development of a newammonia single-fuel burner and study of thespecifications of the equipment (to 2024),
and conducting technology development anddemonstration tests to convert more than
50% of the fuel (calorific value ratio) toPage of 107 of 121

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Ref.

SectionRequirements

Requirement check

Work Undertaken

DNV Findings
ammonia at two different boiler units (toFY2028).
※ Adoption of NEDO Green Innovation Fund
Project "Establishment of Fuel Ammonia
Supply Chain Project”④

Technical verification of hydrogen co-firing
power generation for the construction of alarge-scale hydrogen supply chain- Project period: October 2021 to March
2026- Project description: Conducting
demonstration tests at large-scale LNG-fired
power plants in Japan to convert
approximately 30% (by volume) of LNG intohydrogen for power generation (to FY2025).
※ Adoption of NEDO Green Innovation Fundproject for “Construction of a large-scalehydrogen supply chain”

The⑤

expenditures

Demolition of existing power generation
facilities at Goi Thermal Power Station (LNG)

related todecommissionsof inefficient
thermal power
plants, with theaim ofreplacement for
high-efficiency

Page of 108 of 121⑥

Demolition of existing power generation
facilities at Chita Thermal Power Station(LNG)(Demolition plan is in preparation)

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Ref.

SectionRequirements

Requirement check

Work Undertaken

DNV Findings
thermal power
plants

〇

◎

1-⑤

1-⑥

In the cases where individual
Green Projects have been
specified, it is recommended
that issuers clearly present the
projects to investors.

Yes

In cases where Green Projects
have incidental negativeenvironmental impacts alongwith the alleged environmental
benefits, the issuers should
include information regardingthese negative impacts (e.g.,
how they are assessed, what
the issuers do to curb them)to investors so that theinvestors and market
participants can appropriately
evaluate these impacts.

Yes

No
Not ApplicableNo
Not Applicable

Confirmed
documents:/01//07//09//10//11//12//14/This report
Interviews withstakeholders

The explanations given to investors, taking into accountconfidentiality and other considerations, clearly outline thetransition projects through the disclosure of the Framework andthe results of the external review. Details of the specific eligible
project candidates and projects to be funded are provided tothe external reviewer to confirm eligibility.
In case that the actual projects allocated to are decided inadvance, those projects will be disclosed by every appropriateclassification, through the Amended Shelf Registration
Statement, etc. If the allocation is not decided, it will be
disclosed through the annual report.

Confirmed
documents:/01//07//09//10//11//12//14/
Interviews withstakeholders

Negative impacts on project implementation are those
identified below in the preliminary process for evaluation andselection. Projects with significant negative impacts are limited
to those for which the necessary action has been taken or will
be taken in advance. In addition to the following, if additional
explanations are deemed necessary for investors, it will be
explained in the Amended Shelf Registration Statement, etc.
The funds raised by the transition bond will not be used for
projects related to the following:・ Inappropriate relationships such as unfair trade, bribery,corruption, extortion, embezzlement, etc. that do not comply
with the laws of the country of residence・ Transactions that can cause social problems such as humanrights and the environment

Page of 109 of 121

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Ref.

SectionRequirements

〇

1- ⑦

(In case of where a part ofGreen Bond proceeds is used
to refinance existing Green
Projects,) it is recommended
that the issuers provide
information to the investors
regarding (1) the amount (orthe share) of the bondproceeds being allocated forrefinancing, and (2) which
Green Projects (or Green
Project categories) may be
refinanced.

Yes

When Green Bonds are issued
multiple times to refinance anasset that requires long-term
maintenance, the issuer
should clearly disclose theasset’s age and remaining
useful life and the amount tobe refinanced as at the time of
the bond issuance, evaluate
the long-term sustainability ofenvironmental benefits andobtain an assessment from anexternal reviewers forverification.

Yes

◎

1- 7

Requirement checkNo
Not ApplicableNo
Not Applicable

Work Undertaken

DNV Findings

Confirmed
documents:/01//07//09//10//11//12//14/
Interviews withstakeholders

DNV confirmed that JERA plans to disclose the estimated amount(or ratio) of the portion of the proceeds allocated to refinancing
in the integrated report published on an annual basis or website.
If the inclusion of refinancing and the nature of the refinancing
is determined prior to the issue of the bond, JERA plans todisclose the necessary information in legal documents inaccordance with CTF 4-g).

Confirmed
documents:/01//07//09//10//11//12/Interviews withstakeholders

At present, there are no plans to allocate for refinancing toPage of 110 of 121

projects that are long overdue.
In cases where refinancing is targeted, DNV confirmed that areasonable look-back period (e.g. the transitional nature of thetarget asset should be maintained at the time of refinancing andthe environmental benefits should be realized during theredemption period) should be set.

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

GBGLs-2 Process for Project Evaluation and Selection
Ref.

SectionRequirements◎

2-①

In advance, issuers should provide
investors with information regarding
the following:
The environmental sustainability
objectives that the issuers intend toachieve through Green Bonds.

Requirement
checkWork Undertaken

DNV Findings

Yes

Confirmed
documents:/01//02//03//04//18/
Interviews withstakeholders

The financing that JERA implements by utilizing transition
finance is aimed at achieving the JERA transition strategy whichis in line with the low-carbon decarbonization strategy set by thetransition roadmap for the electricity sector of METI, which aims
to align with the goals of the Paris Agreement.
JERA has developed the roadmap for its transition strategy in“JERA Zero CO2 Emissions 2050 Roadmap for its Business inJapan (Updated in May 2022)” and incorporated the mediumterm goals and a strategic plan for decarbonization (a plan to
introduce technologies that contribute to transition). Each goalbased on JERA's Transition Strategy is disclosed as follows.
These are planned to be explained to investors in advancethrough the Framework, the external review and theAmendment Shelf Registration Statement.

No
Not Applicable

TABLE JERA TRANSITION TARGETS
FY 2030
 Reduce carbon emission intensity of thermal
power plants by 20% based on the long-term
energy supply-demand outlook for FY 2030 as
MEDIUMTERM
GOALS

set by the government.
 Shut down all inefficient (supercritical or less)coal power plants
 Promote demonstration of mixed combustion
with ammonia at high-efficiency (ultrasupercritical) power plants
 Promote the development of renewable energy
cantered on offshore wind power projects

Page of 111 of 121

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Ref.

SectionRequirements

Requirement
checkWork Undertaken

DNV Findings

 Work to further improve the efficiency of LNG
thermal power generation

FY 2035
 Reduce CO2 emissions from domestic operations
by at least 60% (relative to FY 2013) by FY
2035.
 Given the expanded adoption of renewableenergy based on the national government’s
2050 carbon neutral policy, JERA will strive todevelop and adopt renewable energy in Japan Work to reduce carbon emission intensity fromthermal power generation by promotinghydrogen and ammonia co-firing
LONG-TERM
GOALS CO2 zero emissions

JERA's roadmap will be refined in stages based on policy and otherassumptions. The roadmap will also be revised if the assumptions
change significantly.

◎

2-①

In advance, issuers should provide
investors with information regarding
the following:
The criteria for determining theappropriateness of Green Projects
based on the environmental

Yes
No
Not Applicable

Confirmed
documents:/01//02//03//04//18/

It was confirmed through the Framework and Assessment thatthe eligibility of the JERA Transition Project is described on thebasis of which evaluation criteria (standards). Specifically, thecriteria are as follows:-

Page of 112 of 121

Climate Transition Finance Handbook

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Ref.

SectionRequirements

Requirementcheck

sustainability objectives describedaboveWork Undertaken
Interviews withstakeholders

DNV Findings--International Capital Market Association (ICMA), 2020
Basic Guidelines on Climate Transition Finance
Financial Services Agency, Ministry of Economy, Tradeand Industry, Ministry of the Environment, 2021
Green Bond Principles
International Capital Market Association (ICMA), 2021
Green Bond Guidelines
Ministry of the Environment, 2020

These will be specified in the Framework and external review
and will be explained to investors in advance, through theAmended Shelf Registration Statement.
◎

〇

2-①

2-⑥

In advance, issuers should provide
investors with information regarding
the following:
The process for determining how
Green Projects fit the criteria for theachievement of the environmental
sustainability objectives (The process
for the determination refers to thereason why issuers determine that
Green Projects can provide
environmental benefits appropriately inlight of the objectives and criteria for
the use of Green Bond proceeds, how
and by whom are the criteria appliedand used to determine whether Green
Projects are appropriate in light of theobjectives, and the like)
It is recommended that the issuers
explain to investors in advance any

YesNo
Not Applicable

Confirmed
documents:/01//02//03//04//14//18/
Interviews withstakeholders

Yes
No

Confirmed
documents:

Page of 113 of 121

DNV confirmed that there is a description of the process bywhich decisions on the selection of transition projects weremade in the Framework. Specifically, eligible projects are
selected by the Finance Group, based on the eligible criteria,
and finalised by Executive Officer, Head of the Finance Groupafter a comprehensive analysis and review of financial, technicaland operational, market environment and ESG risks by therelevant departments. DNV confirmed that these processes had
been established as a normal operation of JERA that the plan
will be implemented in accordance with the appropriate
processes.

The transition strategy, which forms the basis for the evaluationand selection of transition finance, is JERA's roadmap based on

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Ref.

◎

〇

〇

Section

2-⑦

2-⑨

2-⑪

Requirements

Requirement
check

environmental standards orcertifications that the issuers will referto in evaluating and selecting a Green
Project to be financed.

Not Applicable

If an issuer intends to establish an
exclusion standard to identify andcontrol such potentially material
environmental and social risks of Green
Projects, the issuer should explain it toinvestors in advance as one of thecriteria it applies.

Yes

It is recommended that internal groups
who have expertise, such as theenvironment related group, or external
institutions check whether thedetermination process is suitable froman environmental point of view.

Yes

It is recommended that issuers
position their environmental
objectives, criteria and information on
their processes in the context of their

Yes

Work Undertaken

DNV Findings/01//02//03//04//14//18/

the transition roadmap for the electricity sector of METI, withspecific targets (medium and long term) and plans. These will
be explained to investors through the Framework and second
party opinions. There are no project-specific environmental
standards or certifications. Some activities may include theproject through the fund projects (Green Innovation Fund
Project).
JERA has set out the following in its Framework as common
confirmation for transition finance (a concept equivalent to
exclusion criteria).
The funds raised by the transition bond will not be used for
projects related to the following:・Inappropriate relationships such as unfair trade, bribery,corruption, extortion, embezzlement, etc. that do not comply
with the laws of the country of residence・ Transactions that can cause social problems such as humanrights and the environment
DNV confirmed that there is a description of the process bywhich decisions on the selection of transition projects weremade in the Framework. Specifically, eligible projects are
selected by the Finance Group, based on the eligible criteria,
and finalised by Executive Officer, Head of the Finance Groupafter a comprehensive analysis and review of financial, technicaland operational, market environment and ESG risks by therelevant departments. DNV confirmed that these processes had
been established as a normal operation of JERA that the plan
will be implemented in accordance with the appropriate
processes.
The transition strategy, which forms the basis for the evaluationand selection of transition finance, is JERA's roadmap based on
the transition roadmap for the electricity sector of METI, withspecific targets (medium and long term) and plans. These will

Interviews withstakeholders

No
Not ApplicableNo

Not Applicable

Confirmed
documents:/01//07//09//10//11//12//14/
Interviews withstakeholders

Confirmed
documents:/01//02//03//04//18/
Interviews withstakeholders

No

Not Applicable

Confirmed
documents:/01//02//03//04/

Page of 114 of 121

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Ref.

SectionRequirements

Requirement
check

comprehensive environmental
sustainability objectives, strategy,
policies and so on (e.g., medium-term
management plan, sustainability
strategy, CSR strategy) when
explaining them to investors.

Work Undertaken

DNV Findings/05//09//10//11//1
2//18/

be explained to investors through the Framework and second
party opinions.
JERA's transition strategy, “JERA Zero CO2 Emissions 2050” and“JERA Zero CO2 Emissions 2050 Roadmap for its Business inJapan (Updated in May 2022)”, are closely linked to its ESG
management and its initiatives under the TCFD.

Interviews withstakeholders

GBGLs-3 Management of proceeds
Ref.

SectionRequirements◎

3-①

Issuers should track and manage the net
Green Bond proceeds in an appropriatemanner. These tracking and managing
activities should be controlled by theissuer’s internal process.

Yes

As long as the Green Bonds areoutstanding, issuers manage the amountof the allocation to the green project is

Yes

◎

3-②

Requirement
check
No

Not ApplicableNo

Not Applicable

Work Undertaken

DNV Findings

Confirmed
documents:/01//08//13/
Interviews withstakeholders

DNV confirmed that JERA plans to manage theprocured funds in accordance with the procedures set
out in the accounting regulations, by compiling
payment data extracted from the accounting system
into the "Funds management forms of transition bonds" and ensuring that the total transition-eligible projectamount (or individual project amount) is not less than
the amount of transition finance issued (or allocation
amount).
DNV also confirmed through the interviews that there isan operation (system) that can track the proceeds inthe above management.

Confirmed
documents:/01//08//13/

DNV has confirmed that JERA plans to manage theappropriated and unappropriated amounts on a regularbasis (at least annually) using the funds management

Page of 115 of 121

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Ref.

SectionRequirements

Requirement
check

equal to or more than proceed, or issuers
should periodically adjust to match theamount of the total Green Bond proceeds
to the sum of the amount of the proceeds
allocated to Green Projects and theamount of the unallocated proceeds.
◎

◎

〇

3-②

3-⑤

3-⑥

If any of the proceeds remains
temporarily unallocated, the issuer should
explain to investors how it intends tomanage the balance of such unallocatedfunds and endeavour to promptly allocate
such funds to Green Projects.

Yes

In advance, issuers should provide
investors with information on how Green
Bond proceeds will be tracked andmanaged.

Yes

It is recommended that issuers keep
evidenced documents appropriately that

Yes

No

Not ApplicableNo

Not ApplicableNo

Not Applicable

Work Undertaken

DNV FindingsInterviews withstakeholders

forms of transition bonds, based on data extracted fromthe accounting system on the allocation of proceeds.

Confirmed
documents:/01//08//13/
Interviews withstakeholders

DNV confirmed that JERA will identify the balance of
unallocated proceeds by means of "Funds management
forms of transition bonds", etc., and explain to
investors how the funds will be managed (by cash andcash equivalents) through the Framework. In addition,
DNV confirmed that JERA plans to allocate the funds(including refinancing) to eligible projects in a timely
manner after raising funds. However, if the project
implementation (planning, construction, etc.) takes along time, the period of allocation and refinancing may
be flexibly adjusted to take into account thecharacteristics of the project transition. DNV also
confirmed that if any significant excess to the originalplan occurs, JERA will report it in the reporting, alongwith the reasons for such excess.

Confirmed
documents:/01//08//13//14/
Interviews withstakeholders

DNV confirmed that JERA has internal processes inplace to enable it to track and control the proceeds.
DNV confirmed that these are planned to be explained
to investors in the Framework, etc.

Confirmed
documents:

DNV has confirmed that there are internal processes inplace to ensure that documents relating to the

Page of 116 of 121

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Ref.

SectionRequirements

Requirement
check

demonstrate how they tracked andmanaged Green Bond proceeds.
◎

〇

3 -⑧

3-⑨

In advance, issuers should provide
investors with information on how
unallocated Green Bond proceeds will be
managed when the Green Projects thatwill receive the Green Bond proceeds
have not been determined, or when such
Green Projects have been determined but
the proceeds have not been allocatedbecause the allocation timing has not yet
arrived.

Yes

It is recommended that issuers manage
unallocated Green Bond proceeds as an
asset with high liquidity and safety suchas cash, cash equivalents, or short-term
financial assets

Yes

No

Not ApplicableNo

Not Applicable

Work Undertaken

DNV Findings/01//08//13/
Interviews withstakeholders

management of proceeds are properly retained
throughout the reimbursement period in accordancewith JERA's accounting regulations

Confirmed
documents:/01//08//13//14/
Interviews withstakeholders

DNV confirmed through the Framework that JERA
describes how the pre-allocation equivalent of funds is
to be managed (in cash or cash equivalents).

Confirmed
documents:/01//08//13/
Interviews withstakeholders

Cash or cash equivalents as specified in the Framework
are highly secure assets and comply with therequirements.

Page of 117 of 121

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

GBGLs-4 Reporting
Ref.

SectionRequirements◎

4-①

Issuers should publicly disclose the latest
information on the use of Green Bond
proceeds after issuance

Yes

Issuers should disclose the latest
information at least once a year until full
allocation of the proceeds and as necessary
thereafter in the event of new
developments.

Yes

Disclosed information should include thefollowing contents:<Contents>
・ A list of the Green Projects to which Green
Bond proceeds have been allocated

Yes

◎

◎

4-②

4-③

・ A brief description of each Green Project(including up-to-date progress)

Requirement
check
No

Not ApplicableNo

Not ApplicableNo

Not Applicable

Work Undertaken

DNV Findings

Confirmed
documents:/01/
Interviews withstakeholders

From the year following the issuance of the transition
finance, it was confirmed that the status of allocation of theproceeds from the issuance of the transition finance to theuse of proceeds and the environmental benefits are planned
to be reported at least annually until the allocation of allproceeds is completed. In addition, if necessary, theenvironmental benefits will be reported until the eligible
projects by the transition finance are completed.
The annual report will be disclosed on the JERA’s website.

Confirmed
documents:/01/
Interviews withstakeholders

Same as 4-(1).
In addition, if there is a significant change in the transition
strategy or pathway, allocation plan or project
implementation status (e.g., interruption of the project thatstarted allocation, significant postponement on a yearlybasis, sale or retirement, etc.), JERA will report the change
in a timely manner or in reporting.

Confirmed
documents:/01//07//09//10//11//12/Interviews withstakeholders

The disclosed information will include the following contents
in consideration of confidentiality.
The report will be disclosed on the website.

・ The amount allocated to each Green
Project

Page of 118 of 121<Allocation Status>
 Eligible criteria to be allocated and allocated amounts
 Balance of unallocated amounts and its management
 Estimated amount (or percentage) of the proceeds
used for refinancing<Environmental benefits>
 Environmental benefits are disclosed within the scopeof confidentiality, to the extent practicable, and inconsideration of the characteristics of the project,

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Ref.

SectionRequirements

Requirement
checkWork Undertaken

・ The expected environmental benefits ofincluding an overview of the project (including
progress, completion, operation, etc.) and the
expected environmental benefits (e.g., t-CO2/year)< Other> Efforts to achieve CO2 zero emissions by 2050 will be
reviewed as appropriate in light of policy andtechnological trends, and disclosed as necessary.

each Green Project

〇

〇

◎

4-④

4-⑤

4-⑦

・ Information regarding unallocated Green
Bond proceeds (the amount of theunallocated proceeds or the share of theunallocated proceeds to the total amount of
the proceeds, when the unallocatedproceeds are expected to be allocates toGreen Projects, and how the unallocatedproceeds are managed until allocation)
If Green Bond proceeds have been allocatedto the refinancing of existing projects, it isrecommended that disclosed information
include: 1) the approximate amount (or theshare) of the allocated proceeds used forrefinancing, and 2) a list of the Green
Projects (or the project categories)
refinanced.

DNV Findings

Yes

No

Not Applicable

While it is recommended to disclose 4-③
and 4-④ on a project-by-project basis, if
there are confidentiality agreements,
competitive considerations, or a large
number of underlying projects that limit thedisclosure of details, it is considered that
information is presented in generic terms orin an aggregated portfolio.

Yes

When disclosing information regarding the
expected environmental benefits of projects,
issuers should use appropriate indicators
while ensuring consistency with the“environmental sustainability objectives,”

Yes

No

Not Applicable

Confirmed
documents:/01//07//09//10//11//12/Interviews withstakeholders

DNV confirmed that JERA plans to disclose the estimatedamount (or ratio) of the portion of the proceeds allocated torefinancing in the integrated report published on an annual
basis or website.

Confirmed
documents:/01//07//09//10//11//12/It was confirmed that the disclosure of information is basedon the disclosure of information for each transition project,but may take place in an aggregated format depending on
the circumstances, taking into account confidentiality
agreements.

Interviews withstakeholders

No

Not Applicable

Confirmed
documents:/01//07//09//10//11//12/Page of 119 of 121

The environmental benefits will be based on the CO2
reduction effect, but JERA will use an appropriate indicatorand the progress status of projects depending on the natureof the project to be allocated for transition finance.

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

Ref.

SectionRequirements

Requirement
check

the “criteria” for Green Projects specified in
Section 2, “Process for Project Evaluationand Selection,” and the characteristics ofGreen Projects.
〇

4-⑧

When disclosing the expected environmental
benefits of projects, it is recommended thatissuers, where feasible, use quantitative
indicators and disclose information on
methodologies and/or assumptions as wellas these indicators.

Work Undertaken

DNV FindingsInterviews withstakeholders

Yes

No

Not Applicable

Confirmed
documents:/01//07//09//10//11//12/Interviews withstakeholders

Page of 120 of 121

Environmental improvement effects will be disclosed on a
project-by-project basis, taking into account the nature of the
projects subject to allocation.

JERA Corporation JERA Transition Bond Framework Second Party Opinion Rev1.0

List of Reference Materials/01/

JERA Transition Bond Framework/02/

JERA Zero CO2 Emissions 2050

/03/

JERA Zero CO2 Emissions 2050 Roadmap for its Business in Japan (Updated in May 2022)/04/

JERA Environmental Target 2030

/05/

JERA Group Corporate Communication Book 2021 (Integrated Report)/06/

Business Plans reflecting the integration of existing thermal power projects, etc.
(April 2019)/07/

Investment plan for the use of proceeds/08/

Funds management forms of transition bonds/09/

Project-related information: Overview of Ammonia co-firing demonstration test

/10/

Project related information: Overview of the hydrogen co-firing demonstration test

/11/

Project related information: Goi Thermal Power Station/12/

Project related information: Chita Thermal Power Station/13/

Accounting regulations/14/

Amended Shelf Registration Statement/15/

Ministry of Economy, Trade and Industry, “Green Growth Strategy Through Achieving
Carbon Neutrality in 2050” (December 2020)/16/“Basic Energy Plan" (October 2021)/17/

Transition Roadmap for the Electricity Sector of Ministry of Economy, Trade and Industry,
Japan (February 2022)/18/

JERA Environmental Target 2035
Other related information from JERA website

Page of 121 of 121