Climate Change
Initiatives
GHG Reduction Targets andScenario Analysis on Climate Change Risks and Opportunities

February 10, 2023

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Our Goal (Realizing a Decarbonized Society)
Environmental Policy

Advance Decarbonization

We work towards the decarbonization of our business activities by reducing energy consumption. We will also
tap into geothermal and other renewable energy sources to decarbonize our entire value chain.

Reduction targets
l Reduce in-house GHG emissions (scope 1 + 2) by 47% or more by FY2031 (compared to FY2021)
l Achieve carbon neutrality by FY2046
l Reduce GHG emissions from the activities of supply chains(Scope 3) by 13% or more by FY2031(compared to FY2021)
l Renewable energy utilization rate for electricity used in-house: Target is 100% by FY2036, 66% of which
will be self-sufficient using in-house renewable electricity

Responding to climate change risks and opportunities based on TCFD
recommendations
l Analyze carbon tax and energy costs across the company, and risks and opportunities in eachbusiness specific theme

Investmentl Plans to invest 10.5 billion yen in energy conservation and facility improvements by FY2031
l Plans to invest 30 billion yen in Renewable energy business by FY2031
l Assumption that approx. 1,200 GWh will be switched to renewable energy as of FY2031 (1.2 billion
yen increase compared to FY2021)

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2023/2/10

Carbon Neutral
Responding to climate change risks andopportunities based on TCFD recommendations
Participation in Initiatives
OECM

INDEX
2

|

2023/2/10

Nature Coexistence Site

Carbon Neutral: GHG Reduction Targetsl Target of carbon neutrality by FY2046 and 100% self-sufficiency in renewable energy power by FY2051
l Reduction focused on Scope 2 for FY2031
FY2021

2026

2031

2036

2046

2051

Achieve carbon neutrality

Scope 1+2

GHG reduction target

2041

47% or more reduction (compared to FY2021)

Scope 3
13% or more reduction*1

Renewable energy
utilization rate

32%

80%

100%
Scope 3
Scope 1

Scope 1 and 2
reduction Plan
Scope 2
Excluding
the Cement business,
Aluminum business,
Polycrystalline siliconbusiness.

Scope 3

Reduction

531

47％
96

790

*1 Categories 1, 3, 15 compared to FY2021|

2023/2/10

l Expansion of renewable electricityl Technology improvements (fuelconversion, etc.)
l Energy conservation

Increase

602

FY2021

3

13%
reduction

Scope 2

GHG emissions（kt-CO2e）

Scope 1

7%
5%FY2031

GHG reduction investment in facilities
and processes 10.5 billion yen by
FY2031

Reduction throughtechnological development andutilization of external
technologies*2 Carbon dioxide Capture, Utilization and Storage

FY204688%

MUCCʼs shareof Scope 3
approx. 60% in FY2021 2031
FY2021l Use of renewable electricityl Technology improvements (fuelconversion, etc.)
l Energy conservationl Use of CCUS*2 use

Renewable Energy
FY2021
Renewable electricity
self-sufficiency rate
Amount invested in Renewableenergy business（billion yen）
Renewable energy project
investment effect period

2026

2031

2036

23%

25%

66%

0.4

n Accelerate establishment of geothermal power
development system and business expansion, with theaim of generating power equivalent to our electricity
consumption in FY2051. Expand into new renewableenergy generation, mainly wind power

4%
18%

バイオガス
Biogas
1,000
575
453

FY2026

FY2031※1 CPPA（Corporate Power Purchase Agreement）|

2023/2/10

多結晶事業等を除く

Power generation (GWh)Electricity generated (GWh)

Solar
太陽光

Excluding the Cement business, Aluminumbusiness,セメント事業、アルミ事業、Polycrystalline silicon business, etc.

1,580

0

4

Composition of our electricity consumption
2,000

Wind
⾵⼒ power

100%

n Achieve 100% of electricity from renewable energy in realterms in FY2036. Achieve renewable energy generationequivalent to our electricity consumption and achieve
100% self-sufficiency in renewable energy in real terms
in FY2051.

Geothermal
地熱Hydraulic
power
⽔⼒

500

Switching to renewableelectricity for self-sufficiency

1.2

Trends in our renewable energy generation

1,500

2051

2046

30（FY2024-FY2031）

Procurement cost of renewableelectricity (billion yen)
(Addition to electricity cost)

2,000

2041

FY2051

Overseas external renewableenergyDomestic and external
renewable energy

1,000

Use of renewable energy certificates,
CPPAs*1, etc.

Normal electricity
supplySwitching to our renewableenergy to become selfsufficient
Our domestic
renewable energy

0
FY2021

2026

2031

2036

2041

2046

2051

Efforts Toward CN and Future Vision After CN
l Efforts toward FY2031 are becoming more precise through the compilation of GHG reduction plans and other measures.
l Toward FY2046, it is necessary to achieve carbon neutrality in the non-electricity portion. Drastic changes are needed in
manufacturing processes, including fuel conversion (hydrogen, ammonia, carbon-neutral methane, etc.) while energy
conservation is continued. Development and supply of products and technologies that contribute to a carbon-neutral society arecarried out. Reduction will be promoted through the use of future external technologies such as CO2 capture(solid adsorption,liquid absorption, permeate membrane separation) and treatment (storage and methanation).
FY2024

Copper & copper alloy
business and Electronicmaterials &components business

Metalworking
Solutions business

|

2026

2027

2031

2032

2046

l Study of fuelconversion options(Conceptual planningof quality testing andl Demonstrations, etc.
facility upgrades)l Start using nonl Study andfluorine-based
demonstration ofcleaning solutions
alternatives to fluorinebased cleaning
solutions

Facility renewal

Electrification of facilities

Further electrification,hydrogenation

Smelting and resource
recycling business

Renew fuel conversion
facilities

Renewable energy business

Understand trends toward use of non-CFC gases inelectrical facilities

Conversion to non-CFCs

Development of elemental
and basic technologies

l Understand the impact
on products andfacilities (laboratory
tests)
l R&D of products andtechnologies that
contribute to a carbonneutral society

2023/2/10

Future vision after CN

l Carbon neutralization ofheating furnaces (Hydrogen,ammonia, etc.)l Electrification of facilities

l Switch from heavy oil to LNG and ammonia
l Reduce fossil fuels through increased processingof e-scrapl Increase in-house power generation by installing
solar power generation facilities and saturated
steam turbines

Companywide(GHG reduction investment
in facilities and processes)
52025

l 100% renewable electricity(stable procurement using
in-house power)l Conversion to non-CFC air
conditioning facilitiesl Non-fluorine-based
cleaning solutions
l Others (Future applicable
external technologies)l Selection anddemonstration ofmodels, facilities andl Develop and supply
processes (Cooperate l Transfer of control
products andwith Businessover site
technologies that
Divisions)l Practical application ofcontribute to a carbonl R&D of products andtechnology
neutral society
technologies that
contribute to a carbonneutral society

10.5 billion yen

Development of Carbon Dioxide Decomposition and Recycling Technologies
R&D of technology to decompose carbon
dioxide (CO2) and recycle it as carbon
material

Activated reducing agentl Reducing agent (powdered metal oxide)
activated by reaction with hydrogen

Technical details

CO2 decompositionl Decomposition of CO2 by activated reducing agentl Recovery of nanocarbon and its application as a carbon
source for various uses

l By reacting the activated reducing
agent with CO2, the CO2 isdecomposed and carbon is attachedto the reducing agent.

Features of this technology
l Generates hydrogen in the processl Recycling process enables reducing agents, etc. to be used
repeatedly
Currently, principle verification and elemental research arecompleted using lab-scale test apparatus

Activated reducing

agent

Activated reducing
agent

CO2 decomposition

Reducing agent

Reducing agent

with carbon attachedHydrogenIn future, the plan is to use scaled-up bench-scale test
apparatus to verify equipment performance and optimize
reaction conditions

Hydrogen production(Reducing agent regeneration)

Aiming for practical application in around
2030.

6

|

This R&D was adopted in October 2021 by
the New Energy and Industrial Technology
Development Organization (NEDO) in the"Development of Carbon Material
Manufacturing Technology by Chemical
Decomposition of Carbon Dioxide" under
the project "Development of technologies
for carbon recycling, next-generation
thermal power generation,
etc./Development of practical technology
for CO2 emission reduction and effective
utilization" (for five years starting in
FY2022).
2023/2/10

Water
Water

Reducing agent
after treatment

Hydrogen production

Reactor (Rotary Kiln Type)

Separation of nanocarbon

l Used reducing agentscan be recycled, andhydrogen can beproduced in the recycling
process

CarbonCarbon black

Carbonseparation

Nanocarbon

Electrodematerial
Structural
material

Carbon black, battery
materials, structural
materials, etc.
Expected to have diverse
applications

Reference: History of GHG Reduction Targets (Scope 1 + 2)
Review of company-wide GHG emissions (results
and targets) due to business restructuring andfuture plans

Scope 1

GHG emissions(1,000 tons CO2e)

Scope 2

14,0001 March 26, 2021

12,00011,80010,000Company-wide targets were set, including
Cement business

9,900

10,000

8,700

8,000

2 November 26, 2021

6,000

Target values excluding Cement business

2,500

2,472
1,076

2,072

2,000

940

1,500

3

July 29, 2022

Target values excluding Cement business andAluminum business

1,000

Target values excluding Cement business,
Aluminum business, Polycrystalline siliconbusiness(Assuming project scope from FY2024 at this time)*The base year is changed from FY2014 results to FY2021 results in line with
SBT certification process.
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2023/2/10

1,300

531

800

1,104

1,800

762
1,396

500

698

1,200

1,132
790

602
500

342

0

FY2014 GHG emissions(results)

4 February 2023

1,321

FY2021(Results)

1

96

FY2031 GHG emissions(target)

▲17%

2

▲47%

3

▲47%

4
Down 47% from FY2021 level

(Reference) Scope 3: Reducing Emissions in the Supply Chainl Based on the SBT certification application and assessment process, we set Scope 3 reduction targets
including emissions from affiliates.
l Specifically, we aim to reduce categories 1, 3, and 15, which account for 88% of scope 3, by 13% or more(compared to FY2021) by FY2031.
l We will also work with suppliers of goods and services and other companies in which we have invested to reduce GHG
emissions, including across supply chains other than our own.

Emission Rates in FY2021
100%
90%

Scope1
Scope2

7
5

Total amount of Scope 3
10,335 kt-CO2e
12

Others

80%
70%
60%

65

Category 15

50%

Scope340%
30%

1Category 3

88

21

Category 1

Percentage of total
emissions (FY2021)

Percentage of emissionsin Scope 3 (FY2021)

20%
10%

Categories 1, 3, and 15 accountfor the majority of Scope 3
emissions, which represent
approximately 88% of our total
emissions.
※ Category 1 Purchased goods and services
Category 3 Fuel and energy related activities
not included in Scope 1 or 2
Category 15 Investments

0%*Because MUCC is an equity-method company, only Scope 3 is included in our calculations. MUCC accounted for approximately 60% of total Scope 3（設備、プロセスへのGHG削減投資）
emissions in FY2021.
8|2023/2/10

Carbon Neutral

Responding to climate change risks andopportunities based on TCFD recommendations
Participation in Initiatives
OECM

INDEX
9

|

2023/2/10

Nature Coexistence Site

Climate Change Scenarios Used in Scenario Analysis
In this scenario analysis, the NZE and STEPS of IEA WEO 2021 were mainly used as climate change scenarios
related to transition risks. The effects on business, finance, and strategy were analyzed for the world moving
toward carbon neutrality by 2050 (1.5ºC scenario) and the world on its present course (4ºC scenario).

STEPS

4 ℃ Scenario

Stated Policies Scenario

This scenario reflects current policy settings based on the sectorspecific assessment of specific policies currently in place orannounced by governments around the world.
This scenario assumes that all climate change commitments madeby governments around the world, including nationally determined
contributions (NDC) and long-term net zero targets, will be met
fully and on time.

APS
Announced Pledges Scenario

This scenario assumes that net zero emissions will be achieved
globally by 2050 for developed countries, around 2060 for China,
and no later than 2070 for all other countries.

SDS
Sustainable Development Scenario

NZE
Net Zero Emissions by 2050 Scenario

1.5 ℃
Scenario

This scenario sets an achievable path for the global energy sector
to achieve net zero CO2 emissions by 2050.

STEPS
30
APS

10

SDS
NZE

2000

2010

2020

2030

（設備、Compiled
プロセスへのGHG削減投資）
Source:from IEA WEO 2021
2023/2/10

2040

2050

℃

40

20

10 |

n Global median surface temperature increase over time by scenario
Consideration of bothglobal extremes that
could occur in future

Gt CO2n Annual changes in CO2 emissions by scenario

3.0
STEPS

2.5
2.0

APS

1.5

SDS

1.0

NZE

0.5
2000

2020

2040

2060

2080

2100

Overview of MMCʼs Scenario Analysis Based on TCFD Recommendations
With regard to transition risks and opportunities related to climate change, we conducted scenario analysis for
one theme across the company and for three major themes for each business (total of nine minor themes).
The external and internal data used in the analysis were updated.
Scenario

Theme

Common to allbusinesses

Changes in EV Demand

Changes in Product Demand
Due to EV Shift

Increase in xEV sales
volumeOpportunity:
Large

Copper & copper
alloy businessChanges in Demand Related
to Modal Shift and EV Shift

Rapid change in market
for processed products
due to modal shift, etc.

Risk:
Medium

Metalworking
Solutionsbusiness

Changes in Demand for
Copper Due to Progress in
Responding to Climate
ChangeIncrease in xEV sales
volumeOpportunity:
Large

Smelting andresource recycling
business

Changes in Demand Related
to Automobile Recycling

Decrease in the numberof scrapped vehicles

Risk: Small

Smelting andresource recycling
business

Changes in Demand Related
to Batteries

Increase in demand for
EV batteries and storage
batteries

Opportunity:
Large

Metalworking
Solutionsbusiness

Changes in Demand Related
to LIB-R and PV-R

Increase in demand forautomotive LIB and solar
panel recycling

Opportunity:
Large

Smelting andresource recycling
business

Changes in Demand for
Renewable Energy

Increase in spread anddemand for renewableenergyOpportunity:
Large

Renewableenergy businessChanges in Demand for Recycling Changes in Demand for EBusiness Due to Shift toscrap Recycling Business
Recycling-Oriented Society
Due to Shift to RecyclingOriented Society

2023/2/10

Business

Introduction/strengthenin Risk: Largeg of carbon price tax
system (increase inoperation costs)

Changes in Forms of Energy Use

11 |Impact on
Business

Changes in Carbon Tax, Energy Costs, etc.
1.5ºC Scenario/ 4ºC Scenario

1.5ºC Scenario

Risk/Opportunity
Elements

Increase in demand for E- Opportunity:
scrap recycling
MediumSmelting andresource recycling
business

Changes in Demand Related Increase in demand for
Opportunity:
to Home Appliance Recycling home appliance recycling Medium

Smelting andresource recycling
business※ New themes written in red

UpdateChanges in Carbon Tax, Energy Costs, etc.
(Common to all Businesses)l Risk factor: Introduction/strengthening of carbon price tax system(increase in operation costs)
Increase in production costs due to introduction/strengthening of carbon price system
Anticipatedworld andbusiness
impactImpactanalysis

Indicator

Futurestrategies
andresponses

12 |2023/2/10l Higher taxation on GHG emissions and increased energy costs due to higher electricity prices
l Increased green power certificate procurement amounts and emissions trading costsl FY2031 CP estimated to be approximately 6-12 billion yen, and energy cost increase fromFY2021 estimated to be 7.3-8.2 billion yen

Carbon prices will be a factor in increasing our costs. The impact
of carbon prices on society as a whole is a risk that will result in
lower revenue if GHG emissions reductions are delayed or not
passed on to our product prices.

Group GHG emissions(Scope1,2)Business
impactassessment
Risk: Largel 47% reduction in emissions by FY2031
Target(compared to FY2021)

l Achieve carbon neutrality by FY2046

l Formulate a plan to reduce GHG emissions by FY2031, reduce energy consumption by--electrify processes and switch fuels, andimproving the efficiency of facilities and processes,
switch to electricity derived from renewable energy sources (renewable energies).
l Switch 100% of our Group's electricity use to renewable energy-derived electricity by FY2036
l Accelerate the long-term use of CN fuels and the development of innovative technologies
such as the capture and utilization of CO2

UpdateChanges in Product Demand Due to EV Shift(Copper & Copper Alloy Business)l Opportunity factor: Increase in xEV sales volume
Rapid growth in demand for EV-related products for decarbonization
Anticipatedworld andbusiness
impactl Sales volume of xEVs is expected to increase approximately 24-fold by FY2031 compared to
FY2021.

Impactanalysis

A significant increase in sales of xEVs, which use more copper
products, is expected to significantly lift demand for our rolled
copper products. This will be an opportunity to expand sales bystrengthening production of related products and capturing
demand.

Indicator

Sales of pure copper strips
for vehicles

Futurestrategies
andresponses

13 |l Overall automobile sales will increase toward FY2031, and demand for connectors and bus
bars for automobiles will increase 2.6 times by FY2031 and 3.1 times by FY2051 compared to
FY2021.

2023/2/10

TargetBusiness
impactassessment
Opportunity: LargeEnd of FY2031
Double (compared to FY2021)

l In order to build a supply system that can meet the rapidly growing demand for products for
EVs, increase our production capacity of copper components by at least 1.3 times by FY2031
compared to FY2021 (Production capacity is being increased at Japanese production sites)l Contribute to the transition to a decarbonized society by developing products with higher
performance and lower environmental impact

UpdateChanges in Demand Related to Modal Shift and
EV Shift (Metalworking Solutions Business)l Risk factors: Rapid change in market for processed products due to modal shift, etc.

Anticipatedworld andbusiness
impactImpactanalysis

14 |Decrease in demand for cutting tools for engines due to increase in EV ratiol Significant increase in xEV sales and increased use of lightweight materials
l Production of engine-powered vehicles is projected to decline (FY2031 level estimated at
0.59 times the FY2021 level), resulting in lower sales of cutting tools for engines andtransmissions
The projected increase in demand for tools for difficult-to-machinematerials due to the growth of markets related to electrification andweight reduction may provide opportunities to expand sales byreviewing the product mix and tapping into demand. On the other hand,
there is a risk that sales of cutting tools for engine-powered vehicles,
a current mainstay product, will decline.

Risk: Medium

End of FY2031
2.3 times (compared to FY2021)

Indicator

Sales of cutting tools

Futurestrategies
andresponses

l Contribute to the transition to a decarbonized society by developing and supplying products such as tools formachining difficult-to-machine materials to meet growing demand in the 1.5°C scenario, and expanding ourglobal market share.
l In the automotive product market, we will closely monitor the trend toward EVs and develop tools forprocessing EV parts as necessary. In the new markets that will replace the automotive industry, we also aim
to increase sales of cutting tools by targeting the small precision machining field (robots, semiconductor
manufacturing equipment, telecommunications, etc.) as a strategic market.

2023/2/10

TargetBusiness
impactassessment

New

Changes in Demand for Copper Due to Progress in Responding to
Climate Change (Smelting and Resource Recycling Business)l Opportunity factor: Increase in xEV sales volume

Anticipatedworld andbusiness
impact15 |Rapid growth in copper demand due to increased EV sales aimed at
decarbonizationl Overall automobile sales will increase toward FY2031, and copper requirements will increase
3.3 times by FY2031 and 4.6 times by FY2051 compared to FY2021.
l Sales volume of xEVs is expected to increase approximately 24-fold by FY2031 compared to
FY2021.

Impactanalysis

A significant increase in sales of xEVs, which use more copper, is
expected to significantly lift global copper demand. This will be an
opportunity to increase sales by capturing demand through the
expansion of our electrolytic copper production capacity.

Indicator

Electrolytic copper
sales volume

Futurestrategies
andresponses

l To meet growing copper demand, we will invest in facilities at our domestic bases andincrease our copper ore processing volume by 1.3 times (Naoshima) and electrolytic copper
sales volume by 1.4 times (overall business) from the current levels by FY2031. This stablesupply of electrolytic copper will contribute to the transition to a decarbonized society.

2023/2/10

TargetBusiness
impactassessment
Opportunity: LargeEnd of FY2031
830,000 t

New

Changes in Demand Related to Automobile Recycling(Smelting and Resource Recycling Business)l Risk factor: Decrease in the number of scrapped vehicles

Anticipatedworld andbusiness
impactImpactanalysis

16 |Decrease in the number of scrapped vehicles due to the decline in theJapanese population and the advance of car sharing in a decarbonized societyl Due to the declining population in Japan and the decrease in sales volume resulting from theadvance of car sharing, the number of scrapped automobiles in Japan will remain almost flat
in FY2031 compared to FY2021, and will decrease by about 0.85 times by FY2051.
l The overall number of vehicles processed will decrease, but the percentage of nextgeneration vehicles will increase (18% by FY2031 and 78% by FY2051).

The number of vehicles processed in Japan is expected to
decline, and there is a risk that automobile recycling sales will
decline.

Business
impactassessment
Risk: Small

Indicator

Annual no. of vehicles
processed

Futurestrategies
andresponses

l Aim to increase sales by expanding our market share, on the strength of our efficient processing technology
for next-generation automobiles utilizing technology accumulated in the home appliance recycling businessl As a processing base for next-generation automobile recycling, we will increase our processing capacity by
utilizing alliances in current technology demonstrations, etc., and expanding the number of sites to a total ofthree.
l Contribute to the realization of a recycling-oriented society by meeting resource recycling needs throughautomobile recycling

2023/2/10

TargetEnd of FY2031
70,000 units

New

Changes in Demand Related to Batteries(Metalworking Solutions Business)l Opportunity factor: Increase in demand for EV batteries and storage batteries

Anticipatedworld andbusiness
impact17 |Growing demand for tungsten powder due to increase in EV batteries andstationary storage batteriesl Demand for EV batteries is projected to grow 21-fold by FY2031 and 30-fold by FY2051
compared to FY2021 due to increased sales of BEVs and PHEVs.
l Growing demand for renewable energy is expected to lead to an approximately 20-foldincrease in stationary storage battery installations by FY2031 and a 22-fold increase by
FY2051, compared to FY2021.

Impactanalysis

The growing demand for EVs and the rapid increase in demand for storage
batteries are expected to significantly increase demand for highperformance powders for rechargeable batteries. This will be an
opportunity to increase sales by capturing demand through the expansionof our production capacity for tungsten-based high-performance powder.

Indicator

Production of high-functional
powder for rechargeable
batteries

Futurestrategies
andresponses

l Contribute to the transition to a decarbonized society by developing and supplying products
to meet growing demand in the 1.5°C scenario, such as tungsten powder products for LIBs
for EVs and LIBs for solar power generation equipment.
l Expand our tungsten powder product business in cooperation with Masan High-TechMaterials.
l Contribute to the realization of a recycling-oriented society by promoting tungsten recycling

2023/2/10

TargetBusiness
impactassessment
Opportunity: LargeEnd of FY2031
1.9 times (compared to FY2021)

New

Changes in Demand Related to LIB-R and PV-R
(Smelting and Resource Recycling Business)l Opportunity factor: Increase in demand for automotive LIB and solar panel recycling
Increase in recycling demand due to emissions of automotive LIBs and PVs
Anticipatedworld andbusiness
impactl Considering the reuse of LIBs generated from scrapped xEVs, the recycling volume isexpected to increase approximately 50-fold by FY2031 and more than 350-fold by FY2051,
compared to FY2021.
l Considering the reuse of solar panels, the recycling volume is expected to increase
approximately eight-fold by FY2031 and more than 300-fold by FY2051, compared to FY2021.

ImpactanalysisDue to increased demand for EVs and solar power generation, it isanticipated that the emissions of automotive LIBs and PVs will increase in
the future, and that the demand for recycling will increase accordingly.
This will be an opportunity to increase sales by promoting
commercialization based on demonstration tests currently underway.

Indicator

Amount of automotive
LIBs recycled*

Futurestrategies
andresponses

TargetEnd of FY2031
870t-LIBl Commercialize PV recycling to broaden the scope of target items at home appliance recyclingsites
l Contribute to the realization of a recycling-oriented society by developing automobile and
LIB recycling sites in each region, and by working to upgrade and streamline recycling
technologies* Up until creation of black mass (LIB removal, discharging, dismantling, pyrolysis, crushing and sorting)18 |2023/2/10

Business
impactassessment
Opportunity: LargeUpdateChanges in Demand for Renewable Energy(Renewable Energy Business)l Opportunity factor: Increase in spread and demand for renewable energy

Anticipatedworld andbusiness
impactl Demand for renewable energy is expected to keep growing, with Japan's geothermal andwind power generation projected to increase 4.7-fold and 9.8-fold, respectively, by FY2031
and 15-fold and 48-fold, respectively, by FY2051, compared to FY2021.
l Environmental value ranges from 0.3 yen to 4 yen/kWh depending on the spread ofrenewable energy and supply and demand.

Impactanalysis

While the unit price of electricity sold and the price of non-fossil
certificates fluctuate according to environmental policies andtechnological advances, the demand for renewable energy itself will grow,especially for wind and geothermal power generation. Investigating anddeveloping new power generation sites will provide an opportunity to
expand our Renewable energy business.

Indicator

Our share of renewableenergy sales

Futurestrategies
andresponses

19 |Medium- and long-term expansion of the renewable energy market toward a
net-zero society

2023/2/10

TargetBusiness
impactassessment
Opportunity: LargeEnd of FY2031
575GWhl Work to improve profitability through stable operation of existing power plants and utilization ofenvironmental values, etc.
l Focus on investigation and development of new power generation sites (development of new geothermal
projects in the Hachimantai district and other regions, and entry into wind power generation)l Aim to expand the scale of power generation and related businesses through collaboration with othercompanies

UpdateChanges in Demand for E-scrap Recycling Business Due to Shift to
Recycling-Oriented Society (Smelting and Resource Recycling Business)l Opportunity factor: Increase in demand for E-scrap recycling

Anticipatedworld andbusiness
impactImpactanalysis

Indicator

Futurestrategies
andresponses

20 |2023/2/10

Increase in demand for recycling waste electronic equipment in line witheconomic growth in each countryl Estimated global E-scrap generation, based on global GDP growth and population change,
will increase 1.4 times by FY2031 and 2.5 times by FY2051 compared to FY2021.
l Despite the risk of a decrease in the amount of valuable metals recovered due to a decline in
the grade of valuable metals in E-scrap, the amount of valuable metals recovered when we
process 240,000 tons of E-scrap will be 1.9 times the FY2021 level.
Global E-scrap generation in FY2031 will be 1.4 times higher than in
Business
FY2021. There is a risk of a decline in the grade of valuable metals in Escrap leading to a decrease in the amount recovered, and a risk of
impactdifficulties in collecting E-scrap due to successive entries into the E-scrap
assessment
market by competitors and international moves to lock in resources.
Opportunity
However, increasing our recycling capacity will increase our E-scrap: Medium
processing volume and provide an opportunity to increase our sales.

E-scrap processing capacity

TargetEnd of FY2031
240,000 t

l To meet the growing demand for recycling due to the increased amount of E-scrap generated,enhance E-scrap processing capacity by constructing a recycling yard and strengthening thesystem for efficiently recovering the trace elements in E-scrap.
l Enhance the functions of the Mitsubishi Materials E-Scrap Exchange (MEX) platform for Escrap trading to improve customer convenience and increase E-scrap collection, thereby
contributing to the creation of a recycling-oriented society.

UpdateChanges in Demand Related to Home Appliance Recycling(Smelting and Resource Recycling Business)l Opportunity factor: Increase in demand for home appliance recycling

Anticipatedworld andbusiness
impactl The total weight of waste home appliances disposed of in Japan will increase 1.1 times by
FY2031 and FY2051 compared to FY2021, due to an increase in the number of air
conditioners owned per household, changes in the number of households, changes in thefrequency of replacement due to breakdowns, and changes in the rate of home appliancecollection due to recycling regulations, etc.

Impactanalysis

The amount of waste home appliances is expected to increase
due to rising temperatures, changes in the number of households,
and stricter carbon and recycling regulations. This will result in
an increase in our appliance processing volume, which, based on
our business size projections, will provide an opportunity toincrease sales by 1.4 by FY2031 compared to FY2021.

Indicator

Annual no. of home
appliances processed

Futurestrategies
andresponses

21 |Increased frequency of replacement with more energy-efficient appliances
due to global warming and rising energy costs

2023/2/10

TargetBusiness
impactassessment
Opportunity: MediumEnd of FY2031
5.9 million unitsl Contribute to building a recycling-oriented society by expanding business through M&A of
existing plants and establishment of new RPs
l In addition to automation and labor saving, we will differentiate ourselves by strengthening
management through a cloud-based operation management system, and visualizing
environmental value through LCA evaluations.

Carbon Neutral
Responding to climate change risks andopportunities based on TCFD recommendations

Participation in Initiatives
OECM

INDEX
22 |

2023/2/10

Nature Coexistence Site

Participation in Initiatives
l Active participation in efforts to address climate change issues

TCFD
TCFD is the Task Force on Climate-related Financial
Disclosures, established by the Financial Stability Board (FSB)
at the request of the G20 to examine climate-related
information disclosure and how financial institutions should
respond. In March 2020, we made a clear commitment todisclose our own efforts regarding climate-related risks andopportunities, and decided to endorse TCFD recommendations
and participate in the TCFD consortium.

SBT
SBT is a greenhouse gas emission reduction target set bycompanies with target years 5 to 15 years ahead, consistent
with the levels required by the Paris Agreement, and isintended to accelerate corporate action to address climatechange. We have set ambitious goals to work with our
suppliers to build a supply chain resilient to decarbonization,
and applied for SBT accreditation in July 2022. As of February
2023, our application is under review.
23 |2023/2/10

CDP
CDP is a non-profit organization basedin London, UK, which works withinstitutional investors to manage aninternational framework requiring
companies with the highest market
capitalization to disclose their climatechange and water risk strategies, data,and other information. On an eightpoint scale from A to D-, we received an"A-" rating in FY2023 for CDP Climate
Change. We receive a maximum "A"
rating for CDP Water Security for the
first time, and were selected as an Alist company

GX League
The GX League was established as a forum where companies
actively engaged in GX (Green Transformation), together withgovernment agencies, universities, public research institutions,financial institutions, and other players taking up the challenge
of GX, can work as one to discuss the transformation of theentire economic and social system and put it into practice tocreate new markets. In April 2022, we expressed our support
with the aim of playing a bigger role in creating a society with
reduced carbon emissions.

Carbon Neutral
Responding to climate change risks andopportunities based on TCFD recommendations
Participation in Initiatives

OECM

INDEX
24 |

2023/2/10

Nature Coexistence Site

OECM Nature Coexistence Site
Participation in the 30 by 30 Alliance for Biodiversity
l Coalition of the willing established to achieve the international goal of halting and restoring biodiversity loss by 2030
l Our company registered as a participant in April 2022

30 by 30 Initiative
Cooperation with the Ministry of the Environmentʼs Nature Coexistence Site
(tentative name) certification demonstration project*l Supporting the establishment of a certification system by providing examples of ourefforts in the company-owned Materials' Forests, Teine Forest

Bibai
Nishino
Teine
Otaru

l Aiming to obtain official certification for the Teine Forest in time for the system to bein place in FY2024

Hayakita

Shiraoi
ImakaneMori

Materials' Forests(14,000 ha)

Hokkaido

Nigorikawa
Eastern
Japan

Sado

Osarizawa

IwafuneMikobata
Daigo

AkenobeYoshioka
Sasagatani

Western
Japan

Ryuo
Ikuno
MakimineHogasho

Material no Mori, Teine Forest (Sapporo, Hokkaido)*The Nature Coexistence Site (tentative name) is scheduled to be launched in FY2024 as a system of certifying areas where biodiversity is being conserved
through the efforts of the private sector etc. Demonstration projects are conducted for the purpose of identifying issues that may arise when the certification
criteria and assessment process are put into actual operation in preparation for full-scale operation.
25 |2023/2/10

For people, society and the earth,circulating resources for a sustainable future

26 |2023/2/10