Tokuyama TCFD Report

Disclosures Based on
TCFD
Recommendations
Governance
Boardʼs oversight of climate-related risks and opportunities
Managementʼs role in assessing and managing climate-related risks and opportunities

Strategy
Climate-related risks and opportunities the company has identiﬁed over the short,medium, and long term; andthe resilience of the companyʼs strategy,

taking into consideration diﬀerent climate-related scenarios,
including a 2°
C or lower scenario
Impact of climate-related risks and opportunities on the companyʼs businesses,
strategy, and ﬁnancial planning

Risk Management
Companyʼs processes for identifying and assessing climate-related risks
Companyʼs processes for managing climate-related risks
How processes for identifying, assessing, and managing climate-related risks areintegrated into the company s overall risk management

Metrics and Targets
Metrics used by the company to assess climate-related risks and opportunities
in line with its strategy and risk management process
Scope 1, Scope 2, and, Scope 3 greenhouse gas (GHG) emissions, and the related risks
Targets used by the company to manage climate-related risks and opportunities
and performance against targets

Issued June 27, 2023
Revised July 13, 2023

Tokuyama Group supports therecommendations of the Task Force on
Climate-related Financial Disclosures (TCFD)
and has conducted repeated investigations
into its climate risks and opportunities basedon the TCFD recommendations. In FY2022,
we further analyzed these risks andopportunities, strengthened our strategy, andclariﬁed our metrics and targets.
Tokuyama discloses its climate change eﬀorts
in line with the TCFDʼs four thematic areasthat represent core elements of how

companies operate: Governance, Strategy,
Risk Management, and Metrics and Targets.

1

Governance

Strategy

Board OversightManagementʼs Role

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

GovernanceTokuyama Group has identiﬁed climate change as oneof its most signiﬁcant management risks. Accordingly,
contributing to global warming mitigation is one of the key
objectives under its current Medium-Term Management
Plan, which began in FY 2021.

Figure 1: Medium-Term Management Plan［FY2021 to FY2025］❶ Transform business portfolio

Increase growth businesses share of consolidated
net sales to over 50%

Contribute to mitigation

Expedite development/commercialization of next-gen energy
technologies; reduce GHG* emissions 30％** by FY2030

Practice socially

Step up high-priority CSR initiatives to lay groundwork forfurther growth and realize our vision❷ of global warming❸ responsible management：Greenhouse Gas* GHGBaseyear FY2019**

Two months after announcing our support for the TCFD

Figure 2: Organizational Position of the Carbon Neutral Strategy Div.

recommendations in February 2021, we established Carbon

Corporate Social Responsibility Div.

Neutral Strategy Dept. directly under the president . With the

Corporate Planning Div.

transition from the concept stage to the implementation phase,

Digital Administration & Planning Div.

Tokuyama has now accelerated its eﬀorts by establishing
Carbon Neutral Strategy Div., which has the status of an

New Business Div.

independent division.

Carbon Neutral Strategy Div.
Procurement & Logistics Div.
President

Carbon Neutral Planning Dept.
Biomass Business Dept.

General Aﬀairs & Human Resources Div.
Research & Development Div.
Cement Business Div.
Chemicals Business Div.
Electronic & Advanced Materials Business Headquarters
Life Science Business Div.
Eco-Business Div.
Tokuyama Factory2

Governance

Strategy

Board OversightManagementʼs Role

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Boardʼs oversight of climate-related risks
and opportunities

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Figure 3: Corporate Governance Structure 


Matters related to climate change are discussed by the
Executive Committee, which then adopts resolutions as 

  

long-term strategies to achieve those policies, and the

 


 






Business Operations     Assistmatters of particularly high importance are taken by the Boardof Directors after deliberation by the Executive Committee.





addressing climate change, the formulation of medium andreported to the Board of Directors. Additionally, decisions on necessary. Such matters include corporate policies forselection of investment projects, etc. The resolutions are then
 
 
    

    

         
  

Table 1: Process and Frequency for Reporting and Approval of Climate-Related Matters    

­●      ●          

● 

●         ●    

●     

              

           ●     

3

Governance

Strategy

Board OversightManagementʼs Role

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Managementʼs role in assessing and managing
climate-related risks and opportunities

principle to determine the Groupʼs CSR policies and targets.

●          
●                        


   ●       
●         





council discusses important matters related to internal control,
 

and reports its decisions to the Board of Directors as   and internal control form the foundation of CSR activities, thestrategies, and are overseen by the Board of Directors.

Climate-Related Targets



Based on the principle that appropriate corporate governancenecessary. These decisions are incorporated into the Groupʼs

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management●     


 

   



  

Chaired by the president and composed of the executiveoﬃcers, the CSR Promotion Council meets once a year in

Climate-related Metrics

Risk Management Processes


climate change related initiatives. The president bears
climate change.

Risk ID and Assessment Processes

Figure 4: System to Promote Carbon Neutrality Achievement

Tokuyama has established an approval process for
ultimate responsibility for the Groupʼs eﬀorts to help combat

Metrics and Targets

 

   ●         

Under the CSR Promotion Council is the Sustainability
Committee, which meets two times a year in principle, andthe Environment Committee, which is scheduled to convene
once a year. The former directs the Groupʼs CSR-related
initiatives including those for addressing climate change,
while the later provides broad oversight for environmental
audits at Group sites and consolidates reports on theGroupʼs energy-saving and other activities. The purpose of
these two bodies is to accelerate the Groupʼs eﬀorts to help
combat climate change. We have analyzed the Groupʼs risks
and opportunities associated with climate change and haveincorporated the ﬁndings into our Medium-termManagement Plan 2025.
All the executive oﬃcers and outside directors
participate in seminars to learn more about global warming
and attended two such activities in FY2022. These seminars
monitor the latest trends and regulatory systems related toclimate change and is making preparations to enable rapid

Table 2: Process and Frequency for Receiving Reports, and Monitoring Mechanism

   

    
­                                 ­                             ­               

 

 ­                        

  ­             
               
  

 ­   ­      
        

response as necessary.
4Governance

Strategy

Board OversightManagementʼs Role

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Strategy






 ①   
 

addresses both the risks related to climate change, and thepotential new business opportunities in the environmentalﬁeld. The risk mitigation measures include making visible thecarbon costs arising from the introduction of carbon pricing,addressing the impact of potential changes in customer  

procurement policies, and identifying the impact on
and investment companies. Moreover, by referring to the

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Table 3: Risks Posed by Climate Change (scenario analysis)

The Groupʼs Medium-Term Management Plan 2025

ﬁnancing arising from potential policy changes at ﬁnancial

Metrics and Targets②   



International Energy Agencyʼs (IEA) transition risk scenarios(such as the Net Zero Emissions by 2050 Scenario [NZE]), 

and the Intergovernmental Panel on Climate Changeʼs (IPCC)③  

  

physical risk scenarios (such as RCP8.5 and SSP3-7.0), we
conducted risk and opportunity analysis using 1.5°
C and 4°C
warming scenarios covering a period from the present to④ 

2050. Our aim is to monetize promising business

opportunities while reducing climate change risks by shifting


      

 


  

●   










●   










● 
 






●  
  
  


























● ­  
       









●  
   
  ●   
   





●  
  
 
●       

● 

our portfolio from energy-intensive to value-creatingcompanies.

Climate-related risks and opportunities
the company has identiﬁed over the short,medium, and long term;andthe resilience of the company s
strategy, taking into consideration diﬀerent
climate-related scenarios, including a 2°
C orlower scenario
In FY2021, we began analyzing the risks and 
  

⑤ 

 
  

⑥ 

 
  ●                
●       
     ●        ●­                       ●   ●                ●     ●        

●      ●   

   
●     
      

●­          ●           ●­          ●   ­

●        

Short term: by FY2025; medium term: by FY2030; long term: by FY2050

Group of those risks and opportunities, the potential timing

Based on the analysis results, the Group isopportunities that the Group faces due to climate change. Inof their occurrence, the impact on business, and theinvestigating speciﬁc measures to enhance resilience in its

FY2022, we evaluated the potential ﬁnancial impacts on thepriorities for addressing these risks and opportunities.

organizational strategies.

5Governance

Strategy

Board OversightManagementʼs Role

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Government policy and regulations① Carbon pricing andenergy procurement costs

Impact on Tokuyama Group

Increase in operating costs due to expandedcarbon pricing (medium to long term)
Tokuyama uses coal mainly for onsite power plants.

achieved by FY2030 have also been implemented forindustries with substantial emissions.
• Cement production: Achieve a non-fossil fuel ratio of 28%
in ﬁring processes (kilns, etc.)

We paid approximately 1.7 billion yen in environmental• Chemical industry (soda industry: main fuel is coal):taxes (Japanʼs petroleum and coal tax, and carbon tax) in

Reduce coal consumption by 30% compared to FY2013

FY2022, which is equivalent to approximately 12% of
operating income.
Moreover, under the Japanese governmentʼs

Tokuyama will set targets based on establishedguidelines and work on conversion to greener fuels.
While there are no penalties for failure to achieve

growth-oriented carbon pricing plan, Phase 1 of emissions

targets, if the performance of an organization is found to be

trading will begin in FY2023, with full-scale emissions trading

signiﬁcantly inadequate, recommendations andstarting in FY2026. Then a carbon levy will be introduced inannouncements will be made after considering the level of

FY2028, which will gradually increase thereafter.

the relevant technology and the situation for non-fossil

Accordingly, Japanese carbon pricing will be introduced inenergy supply.

stages. Since the details of these programs have not been

We are working to achieve a 50% reduction compared

fully determined yet, it is diﬃcult to estimate the ﬁnancial

to FY2019 for GHG emissions from onsite power plants by

impact on the Group at this time. However, assuming a tax

FY2030, and is aiming to switch to non-fossil fuels (biomassof 10,000 yen per ton of CO₂ emissions from fuels-derived, if

and ammonia) to achieve this. To achieve a 30% reduction

our CO₂ emissions remain at the same level as in FY2022,

in GHG emissions through co-ﬁring with biomass and a 20%

the annual cost will be approximately 48 billion yen.

reduction through co-ﬁring with ammonia, we estimate thatapproximately 11 billion yen will need to be invested in

Increase in mitigation measure costs due totightening of GHG emission regulations

biomass technology along with about 15 billion yen inammonia.

In April 2023, Japan implemented the Revised Act on
Rationalizing Energy Use. Under this law, in addition toconventional promotion of energy conservation,requirements for conversion to non-fossil energy have been
established. Guidelines for quantitative targets to be6

Governance

Strategy

Board OversightManagementʼs Role

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Government policy and regulations① Carbon pricing andenergy procurement costs

Response measures

Monitoring carbon pricing policy trends andconversion to non-fossil fuels
The Group needs to steadily reduce its GHG

Evaluation and implementation of measures
based on internal carbon pricing
In FY2019, Tokuyama adopted internal carbon pricing

emissions to mitigate the risk of increased manufacturing(ICP) as a criterion for evaluating investment projects tocosts due to carbon pricing.

promote GHG emissions reduction. Initially, the price ofTokuyama is aiming to achieve a 50% reduction incarbon was set at 3,700 yen per ton of CO₂, based on the

GHG emissions from onsite power plants compared toEuropean Union Emissions Trading System (EU-ETS) price.

FY2019 by 2030, and it plans to switch to non-fossil fuels

In order to further enhance our eﬀorts to reduce GHG(biomass and ammonia) for onsite power plants. The rate ofemissions, in FY2022 we raised our price of carbon to

co-ﬁring with biomass will gradually increase starting in

10,000 yen per ton of CO₂. In the short and medium terms,

FY2023. Co-ﬁring with ammonia is scheduled to begin

we will promote energy-saving activities and work to reduce

starting in FY2025 and beyond. A basic plan for biomass andcoal consumption by co-ﬁring with biomass and ammonia atammonia adoption is currently being implemented, as part ofonsite power plants.

a project sponsored by Japanʼs Agency for Natural
Resources and Energy (FY2023 Oil Supply Structure
Advancement Project Cost Subsidy: Project to Promote
Transition to a Stable Supply of Next-Generation Fuels).
To cover the cost of this emissions reduction project,

Participation in the GX League
As various regulatory systems, including carbon
pricing, are gradually implemented, we will need to collectwe will utilize government subsidies, and pass on theinformation in order to respond quickly to theseremaining costs through higher product prices.

developments. As of FY2023, we have joined the JapaneseOver the short term, the Group will promote

governmentʼs GX League for companies and we are alsoenergy-saving activities in each manufacturing department.

participating in the emissions trading framework. Going

These include installing new electrolyzers with highforward, the GX League will play a central role forenergy-saving eﬃciency and reducing coal consumption by

investigating various issues related to carbon neutrality

co-ﬁring with biomass and hydrogen at onsite power plants.

achievement, including carbon pricing. Tokuyama will gather

In FY2022, we were able to reduce GHG emissions byrelevant information and express its opinions at GX League

120,000 tons-CO₂e through energy conservation activities.

meetings, in order to help create a regulatory system that iseven fairer.

7

Governance
Board OversightManagementʼs Role

Strategy

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Technology② Green process adoption
measures

Impact on Tokuyama Group

Response measures

Increased green energy production andprocurement costs (medium term)

Construction of large-scale supply chains
and advancement of eﬃcient technologies
for green energy utilization

Tokuyama has four coal-ﬁred power plants. One ofthese is a circulating ﬂuidized bed boiler that can also

Building a large-scale supply chain is essential for

operate on biomass exclusively, and we plan to increase thereducing the cost of green energy. To procure biomass fuel,biomass use ratio and reduce coal use in FY2023. On the

the Group installed equipment for handling wood pellets atother hand, the remaining three boilers are pulverized

the port of Tokuyama. We are making eﬀorts to eﬃciently

coal-ﬁred boilers, and capital investment will be required tounload biomass fuel, which we will need more of going

convert them to biomass or ammonia use. If we reduce ourforward.

GHG emissions by 30% through biomass co-ﬁring and by

To obtain ammonia, we are working with relevant

20% through ammonia co-ﬁring, approximately 11 billion yen

companies to build an ammonia supply chain in the Shunan

will need to be invested in biomass technology along with

Industrial Complex.

about 15 billion yen in ammonia equipment. At the sametime, operating costs are expected to increase due to the
procurement of biomass and ammonia.

Increased costs for green material
procurement and green process conversion
costs due to the lack of technology andmarket maturity (medium to long term)

Procurement system and processdevelopment
In order for the green market to become established,major players need to participate on both the supply anddemand sides. Tokuyama is making eﬀorts to establish agreen market as both supply and demand participants.

In order to achieve carbon neutrality, not only does
energy input need to be green, but also raw materials andproduction processes. Many of these processes are still
being developed, as relevant markets and technologies are
yet to be established. Since many green technologies andmarkets are still immature, there is a risk of increased costs.

8

Governance

Strategy

Board OversightManagementʼs Role

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Evaluation③ Evaluation by stakeholders

Impact on Tokuyama Group

Decline in market value and increase in
ﬁnancing costs due to a poor evaluation ofcarbon neutrality initiatives（medium to long term）

Sustainability risks of biomass fuels

Our stock price could suﬀer if investors see thetime, we are investigating the development andWe plan to use Green Gold Label-certiﬁed palm kernel
shells to fuel our power plants, and will increase
procurement of this material going forward. At the sameownership of coal-ﬁred power plants as a high risk.

procurement of other biomass fuels, mainly agricultural

Moreover, we could be charged higher interest rates on our

residues. By increasing co-ﬁring with biomass, we will reduceborrowing if we are evaluated as a high-risk company, andour coal use and GHG emissions.

our ﬁnancing costs would then increase.
On the other hand, the palm industry has been

Risk of litigation by local residents to shut
down or decommission coal-ﬁred power
plants owned by Tokuyama(medium to long term)

criticized for problems such as deforestation and labor rights
issues. Fraudulent certiﬁcation of wood pellets has also
been discovered in Vietnam, so expanding biomass fuelprocurement also carries a certain level of risk.

In Japan, lawsuits have been ﬁled against
constructions of coal-ﬁred power plants by local residents,
and there have been cases where such construction plans
have been cancelled. As Tokuyama owns four coal-ﬁred
power plants, we could be sued to shut down ordecommission these facilities if our eﬀorts to reduce coalconsumption are seen as insuﬃcient.

9Governance

Strategy

Board OversightManagementʼs Role

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Evaluation③ Evaluation by stakeholders

Response measures

Enhanced disclosure of information andsetting GHG emissions reduction targets

Transform Business Portfolio
Tokuyama will conduct business evaluations using

For Scope 1 and 2 emissions, we have set goals toenvironmental benchmarks such as internal carbon pricing.

achieve carbon neutrality by FY2050 and achieve a 30% cut

We will also focus on changes in the factors that determine

in GHG emissions by FY2030 compared to FY2019. The

competitiveness during the transition to a low-carbon

Group is calculating and disclosing emissions in accordancesociety and incorporate them into our business strategy. As

with the GHG Protocol. Tokuyama also calculates andpart of these activities, we will investigate the transfer of

discloses its Scope 3 emissions on a non-consolidated basis.

resources from businesses deemed to be less competitive to

We also disclose information based on the TCFD
recommendations and actively provide the information
required by stakeholders.
The Group will strive to build even stronger
relationships of trust with local residents by explaining our

growth businesses.
The Group will investigate the ways to obtain ﬁnancing
at low interest rates (such as issuing green bonds) by
developing businesses that accelerate the shift to carbon
neutrality.

environmental initiatives and actively participating incommunity activities.

Ensuring the sustainability of biomass fuelIn order to reduce GHG emissions, we plan toincrease co-ﬁring with biomass going forward. We will focus
on achieving sustainability, such as securing biomass fuelsthat have acquired the level of certiﬁcation required by
Japanʼs feed-in tariﬀ system for renewable energy. We will
also promote CSR procurement, which addresses one of ourmaterial issues. At the same time, we will work to mitigate
risks, such as promoting procurement in regions with low
sustainability risks.

10

Governance

Strategy

Board OversightManagementʼs Role

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Market④ Penetration of green
procurement by customers

Impact on Tokuyama Group

Rejection of products by the market basedon large carbon-footprint evaluation(medium to long term)
As a chemical company, Tokuyama produces

Decrease in proﬁtability due to the inability topass on the price to fully cover costs for green
process adoption (medium to long term)
Tokuyama is investigating fuel conversion and green

substantial GHG emissions. In recent years however, thepower procurement to reduce GHG emissions fromaccepted rules for calculating a product carbon footprint

fuels-derived, but we also assume that energy costs will rise(i.e., the GHG emissions associated with the product over its

going forward. Therefore, we need to assume anlife cycle) have become clearer. Going forward, we will needappropriate green market energy price that takes into

to share carbon footprint data in response to inquiries fromaccount the rising costs associated with fuel conversion.

customers, and targets to reduce these footprints must be

However, there is a risk of lower proﬁt margins if the costs

established for each product. If we fail to achieve these

related to green process adoption cannot be passed ontargets, sales of our products could be aﬀected. In particular,

through higher product prices.

sales to customers who are actively working to combat
global warming could very well decrease.

11

Governance

Strategy

Board OversightManagementʼs Role

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Market④ Penetration of green
procurement by customers

Response measures

Steady reduction of GHG emissions
To ensure that its products remain competitive in themarket, the Group must achieve its FY2030 GHG emissions
reduction targets.
First, we will further promote ramp up energy-saving

Enhancing supply chain cooperation forproper green market formation
Businesses that directly emit GHG emissions are
responsible for reducing those emissions. However, therelevant costs will likely not be borne entirely by those

activities to fully eliminate any energy waste. Tokuyama willbusinesses, but by society as a whole. Therefore, we will

steadily reduce GHG emissions from fuels-derived bystrengthen cooperation with other stakeholders so that thesteadily adopting co-ﬁring with biomass and ammonia.

entire supply chain can work to help create a sound green
market.

Creation of green products based on massbalance approach certiﬁcation
Since Scope 1 emissions from electricity and steam
generation cannot be reduced using carbon oﬀset credits,

Construction of a carbon footprint
evaluation system
In order to promote greener products, it's necessary toand since the Tokuyama Factory generates all its own

visualize the GHG emissions associated with each productpower, we need to ensure that all the electricity produced

over its entire life cycle, along with the method forby the factory is green in order for it to make green

calculating each productʼs carbon footprint. Guidelines for

products. Therefore, we will obtain certiﬁcation for biomass

carbon footprint calculation have already been issued by thepower and steam generation based on the mass balance

government and industry groups, so we will create our own

method. This will enable speciﬁc products to be labeled as

calculation rules based on these.

green and will satisfy customer demand for green products.

12Governance
Board OversightManagementʼs Role

Strategy

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Physical risks (acute)⑤ More frequent extreme weather
events and sea level rise

Impact on Tokuyama Group

Response measures

Wind and ﬂood damage to production
facilities; production plans delay andincreased costs due to supply chain
disruptions, etc. (long term)

Enhanced Business Continuity Plan measures

Since the Tokuyama Factory is situated in a coastal

To mitigate the risk of plant shutdown due to natural
disasters, the Tokuyama Factory is strengthening its
infrastructure. As a measure to protect against storm surges
during typhoons, which are deemed to be the greatest

industrial complex, if extreme weather events (such as heavy

threat in terms of natural disasters, the factory constructed arains, lightning strikes, and major typhoons) increase due toseawall during the period from FY2000 to 2016. Considering

the eﬀects of climate change, production could be

the greatest potential wave height estimates for the next 15

interrupted due to facility ﬂooding. In the past, large

and 30 years, the height of the seawall was raised from 4.7

typhoons have not caused suﬃcient damage to aﬀect

to 5.5 meters. This cost about 300 million yen in total,

operations, but they have caused water and other damage

including materials, transportation, labor, administrative

to some equipment. In 2018, when torrential rains caused

work, and other expenses.

landslides that damaged the JR Sanyo Main Line, we were

In 2019, the high waves generated by Typhoon No.15

forced to shift some transport from rail to truck, whichcaused ﬂooding beyond designated storm surge zones, so

increased transportation costs by 52 million yen.

Japanʼs national standards were revised. Based on that,

Since Tokuyama transports most of its raw materials

Yamaguchi Prefecture also updated its standards in 2022. In

and products by sea, more frequent storms could

the same year, we used the prefectureʼs revised standards

signiﬁcantly reduce proﬁtability whenever marine transport isand sensitivity analysis to predict potential ﬂood damage todelayed or halted as a result.

the Tokuyama Factory due to high waves from a typhoon,using various potential typhoon courses and magnitudes.
Going forward, we will set typhoon protection standards for
the Tokuyama Factory, compare the required seawall heightwith its existing height, and plan improvements such as
raising the seawall height to meet the requirement. Our
analysis also revealed that storm surges could cause
ﬂooding damage to the factory through backﬂow andoverﬂow in the plant s discharge channel, so we willconsider measures to rectify this as well.

13

Governance

Strategy

Board OversightManagementʼs Role

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Physical risks (chronic)⑥ Long-term intensiﬁcation of
extreme weather eventsand rising sea levels

Impact on Tokuyama Group

Response measures

Decrease in production capacity due toinsuﬃcient factory cooling capacity causedby rising average temperatures (long term)

Setting GHG emission reduction targets
In order to help curb the rise in global averagetemperatures, GHG emissions need to be reduced. With

Situated in a coastal industrial complex in Shunan

Scope 1 and 2 emissions, the Group aims to achieve carbon

City, Yamaguchi Prefecture, the Tokuyama Factory contains

neutrality by FY2050 and achieve a 30% reduction in GHG

many manufacturing facilities and produces a wide variety ofemissions by FY2030, compared to FY2019. First, we willproducts. Recirculating water is used to cool thefurther promote ramp up energy-saving activities to fully

manufacturing equipment. Once this water has captured

eliminate any energy waste. We will steadily reduce GHG

heat from the manufacturing process, it is cooled by theemissions from fuels-derived by steadily adopting co-ﬁring

eﬀects of evaporation in cooling towers, and thenwith biomass and ammonia.

recirculated. As average air temperatures rise, the amount ofenergy required to cool heated water increases. In order tomaintain cooling capacity, the factory must increase thecapacity of its cooling towers using greater evaporationarea, while raising the capacity of circulation pumps, andredesigning the piping. This requires an investment of
hundreds of millions of yen or more. If this is not done,
production levels could be limited by the factoryʼs cooling
capacity.

Production halts due to storm surges causedby rising sea levels (long term)
As it is located in a coastal industrial complex, theTokuyama Factory is susceptible to ﬂooding caused bystorm surges. If one manufacturing facility within the
Tokuyama Factory were to be shut down for 10 days, theestimated losses would be approximately 300 million yen.

14

Governance
Board OversightManagementʼs Role

Strategy

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Climate-related risks and opportunities
the company has identiﬁed over the short,medium, and long term;andthe resilience of the company s
strategy, taking into consideration diﬀerent
climate-related scenarios, including a 2°
C orlower scenario

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Table 4: Climate Change Opportunities (scenario analysis)

  

①     

   

●    

         


 

  ●               ●­                            
    ●                  
②   

  
  




③    ●          

●        




15

Governance
Board OversightManagementʼs Role

Strategy

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Market① Expanding demand in theenvironmental market

Impact on Tokuyama Group

Response measures

Expansion of businesses
oﬀering waste disposal,
eﬀective utilization of
resources, and measures tocombat global warming

Commercialization of renewable resources and energy(biomass and hydrogen)

Waste recycling is expected tofurther expand in response to rising

We are promoting co-ﬁring with biomass as a measure to reduce coalconsumption. To help secure a stable supply of biomass fuel, Tokuyama hasestablished a Biomass Business department and is investigating the development
and commercialization of biomass fuel.
In the ﬁeld of waste gypsum board recycling, group company Tokuyama Chiyoda

environmental awareness and the need to

Gypsum Co., Ltd. (TCG) has decided to construct a new recycling plant in Muroranmitigate resource procurement risks

City, Hokkaido, its third such site in Japan. Established in 2011 as a joint venture

heightened by geopolitical factors. While

between Tokuyama and Chiyoda Ute Co., Ltd., TCG operates a waste gypsum board

renewable energy use is growing, there isrecycling business. It uses the world's ﬁrst technology for continuous large

also demand for carbon-neutral thermalrecrystallization of waste gypsum, a process developed by Tokuyama. In 2013, TCG

power generation in the manufacturing

began operations at the Mie Headquarters Factory, and in 2016, it started operationsindustry, which requires heat forat the Kanto Plant in Sodegaura City, Chiba Prefecture. Currently, both plants recycle

production.

approximately 100,000 tons of waste gypsum board annually. At its new facility, TCG
will source waste gypsum board from all over Hokkaido in order to manufacture andsell recrystallized gypsum dihydrate. As a ﬁre-resistant material widely used in homes
for interior walls and ceilings, gypsum boardʼs disposal volume is increasing every year
along with home renovations and demolition. Moreover, due to the diﬃculties
associated with proper disposal of this material, there are growing expectations for
gypsum board recycling.
In 2019, Tokuyama constructed an experimental facility at the Nanporo
Industrial Park in Nanporo-cho, Sorachi-gun, Hokkaido, to develop technology forrecycling solar cell modules using catalysts. This activity has been sponsored by
Japanʼs New Energy and Industrial Technology Development Organization (NEDO) asa project to develop elemental technology for recycling solar cell materials. NEDOʼsaim is to promote development of basic technology for achieving a stable long-term
power supply from photovoltaic power generation systems. Through the developmentof this technology, we aim to commercialize solar panel recycling in anticipation of ajump in panel disposal in the 2030s.

16Governance
Board OversightManagementʼs Role

Strategy

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Market② Shift to carbon neutrality
by regions
and industrial complexes

Impact on Tokuyama Group

Response measures

Enhancing site competitiveness bypromoting large-scale green supply chainsfor energy and materials

Joining the Decarbonization Promotion
Council, promoting green supply chain
construction, and actively participating inand promoting green technology
development

As the Group cannot achieve carbon neutrality all on
its own, we must work together with the industrial
complexes and communities in which we operate. Making

The Shunan Industrial Complex Decarbonization

an entire industrial complex carbon neutral is not easy, as it

Promotion Council was established in February 2022. Its aim

requires high levels of technology development andis to maintain and strengthen the competitiveness of theinnovation. However, by striving to achieve carbon neutrality,

Shunan Industrial Complex while also achieving

members of an industrial complex can become much more

decarbonization. The Council is engaged in the following

competitive.

core activities: (1) creating a grand design for the Shunan
Industrial Complex, along with a roadmap for its
achievement based on the backcasting planning method; (2)building an initiative promotion system based oncollaboration between companies, while promoting
technology R&D and demonstration projects, and; (3)making eﬀective use of existing facilities, stock, andresources, while receiving support, and providing policy
proposals, and needs information from/to the national andprefectural governments.

17

Governance
Board OversightManagementʼs Role

Strategy

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Resource use Eﬃciency③ Requests for
CCU-related products

Impact on Tokuyama Group

Response measures

Entering new business ﬁelds by establishinga carbon recycling system

Accelerating R&D, demonstration projects,
and actual green technology adoption inbusiness operations

While carbon pricing is making CO₂ emissions morecostly, it also means increasing the value of carbon in otherIn order to establish a carbon recycling system,

words. Carbon is indispensable for human life, and the

Tokuyama is now engaged in two activities: (1) conducting

supply of carbon will become ever more restricted due toveriﬁcation testing of CO₂ recovery; and (2) examining thelimitations imposed on the use of fossil resources. Therefore,business feasibility of making products from the recoveredin the near future, carbon recycling could become an

CO₂. As part of the ﬁrst activity, a CO₂ recovery device wasimportant technology. In other words, any company that

installed at our cement plant to recover CO₂ from exhaustemits a lot of CO₂ will also have a source of carbon.

gases. We are evaluating the reliability of long-term

Tokuyama aims to use this position as a strength to advance

continuous operation of this device while analyzing theinto new business areas.

resulting data. This includes data on impurities in therecovered CO₂ gas. We will verify the application of thisdevice as an optimal CO₂ recovery technology for cement
plants. For the second activity, we are examining thefeasibility of producing methanol from CO₂ and hydrogen.
As we conduct trial calculations to determine the costs for
producing green methanol, we are also conducting market
surveys with the idea of creating a green methanol market.

18

Governance

Strategy

Board OversightManagementʼs Role

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Impact of climate-related risks
and opportunities on the companyʼsbusinesses, strategy,
and ﬁnancial planning

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Table 5: Investigation of Business Opportunities Arising from Climate Change 

   





 



  



























  


Using our analysis of opportunities arising from climatechange, and after examining business opportunities in theenvironmental ﬁeld, we determined more speciﬁc details   

and evaluated the relevant time scope, ﬁnancial impacts and●      

● 

priorities.

●       

●   ●  

●  

  

● 



  

 

●  

● 
●  ● ●     ●     

●      
  

●  

 

● 

●    

●  

●     ­
●    

   ●   

    ●    19

Governance

Strategy

Board OversightManagementʼs Role

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Risk Management
For Tokuyama Group, corporate management risks

Figure 5: Expert Committees and Meeting Bodies in Charge of Risks

include any events or factors that could damage its
corporate value, aﬀect the sustainability of its businesses, or  

hinder the achievement its organizational goals. These risks
also include any such events or factors that would requirecross-organizational response. We have a management
system in place to ensure that we can appropriately mitigate
these enterprise risks.

Companyʼs processes for identifying andassessing climate-related risks         
    
 
   

  
   

To direct our group-wide enterprise risk management
system, we have established a Risk Management andCompliance Committee chaired by the director responsible
for CSR, which is positioned under the CSR Promotion
Council chaired by the president. By monitoring international                        

   ­         

   ­        

  ­                  ­               

  ­          
     

      

trends and working with its expert committees, the Risk
Management and Compliance Committee examines eventsand factors that have just emerged or that have changed interms of the potential level of impact. It then identiﬁes new
potential risks and assigns them an expert committee fordetermination.

20

Governance

Strategy

Board OversightManagementʼs Role

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Companyʼs processes for managing
climate-related risks
The Risk Management and Compliance Committee,
chaired by the director responsible for CSR, performs
making visible and mapping risk levels both quantitatively(monetary loss, decrease in market share, and scale ofClimate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets 


*The chairperson of each committee or meeting body is a director and responsible for the relevant risks     * 

 

           ­                          
 ­     group-wide enterprise risk management. It does this by
and qualitatively from perspectives such as impact

Risk ID and Assessment Processes

Table 6: List of Enterprise Risks (FY2023) 

Metrics and Targets 

                          impact, etc.), occurrence frequency and probability, andvulnerability.

                 
                     
         
      

                        
       

 
  

               
             
 ­          

 
  

               
          

 
  

                                 
              

 
                   
                

     

         

             
         
­                      

       21

Governance

Strategy

Board Oversight

Risk Management

Risks and Opportunities;

Managementʼs Role

and

Resilience of Strategy

Impact on Organization

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Figure 6: Mapping of Signiﬁcant Enterprise Risks (FY2023)

Deﬁnitions of major risk categories■…Hazard risk (External environment risk)



Risks posed by the external environment
and potential events­
■…Business risk (Strategic risk)

Risks posed by the quality and accuracy of corporate
strategies that aﬀect performance and corporate value■…Operational risk (Business process risk)

Risks arising from deﬁciencies in internal processes
related to business execution, or from inadequate functions

Deﬁnition of scale of damage and impact

Large Damage that threatens the survival of the








company, as well as substantial damage suchas loss of assets

Moderate Signiﬁcant loss of proﬁts, or minor loss of assets

Minimal Little impact on corporate proﬁts and assets
Deﬁnition of occurrence frequency and probability

High Occurs more than once a year

Will almost surely occur in the near future

Medium Occurs several times a decade
Low Occurs once every decade or more



Deﬁnition of vulnerability



High

Mitigation measures have not been
implemented or are completely inadequate

Moderate

Some measures have been implemented, butthey are still insuﬃcientLow

Suﬃcient measures have been implemented
and a management cycle is in place

22

Governance

Strategy

Board OversightManagementʼs Role

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

The expert committees, chaired by the relevant

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets  

risks they are responsible for (including risk reduction,
policies, the Group plans and implement measures to

Risk ID and Assessment Processes

Figure 7: Process of Identifying Enterprise Risks

directors, examine and determine mitigation policies for the
avoidance, transfer, and retention). Based on the determined

Metrics and Targets      

manage risks. It also conducts periodic reviews to ensure
performance based on the risk management system.

    
   

              
 Given the accelerating global trend toward

Based on these analyses, the Risk Management and        
How processes for identifying, assessing,and managing climate-related risks areintegrated into the companyʼs overallrisk management    

                     

together to address all the risks.

decarbonization, under the Group's Medium-Term

Compliance Committee has positioned failing to respond to

Regarding individual activities to address climate

Management Plan 2025, we have decided that we must shiftglobal decarbonization as the greatest risk and decided tochange, for example, the Tokuyama Factory regularly holds

away from our energy-intensive business structure, which

manage it through multiple expert committees. Risks related

energy management committee meetings chaired by thehas been our strength up to this point.

to environmental laws and regulations are handled by the

Factory general manager. The members discuss and check

Therefore, we have updated our mission, which is now

Environment Committee, while physical risks such as storm

the progress made on planned activities for energy-saving,

To create a bright future in harmony with the environment,

surges at manufacturing sites are addressed by the Safetyincluding improvement of energy intensity. Moreover,in collaboration with its customers, based on chemistry.

Committee. The Sustainability Committee oversees initiatives

important matters related to risk management are reported

One of the priority issues of the Medium-Term Management

related to climate change and compliance with soft law

as necessary to the Executive Committee (mentioned above)

Plan 2025 is Contribute to mitigation of global warming

requirements (e.g., recommendations or guidelines ) related

and the Board of Directors.

and we are pursuing group-wide initiatives to achieve this.

to external disclosure, and these committees are working

23

Governance

Strategy

Board OversightManagementʼs Role

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Metrics and Targets
Figure 8: GHG Emissions Reduction Targets
For the purpose of setting management indicators andtargets, Tokuyama Group considers the period up throughFY2025 (the ﬁnal ﬁscal year for the Medium-Term(Ten thousand tons-CO₂e)

800

term extending through FY2030, and the long term throughFY2050.

Metrics used by the company to assessclimate-related risks and opportunities inline with its strategy and risk
management process
In the past, the Group has measured its GHG

 

­

Management Plan 2025) as the short term, with the medium   

700

    
     

 

600

500

400

emissions, GHG intensity and energy intensity. Under the
new Medium-Term Management Plan 2025, however, we
aim to help mitigate global warming by measuring total

300

group-wide GHG emissions and achieving certain
management targets. These are a 30% reduction in GHG
emissions compared to FY2019 by FY2030, and the

200 



attainment of carbon neutrality by FY2050.
Moreover, when calculating compensation for all
executive oﬃcers, we look at performance with respect to100

relevant material issues determined by the Group as
indicators and evaluate each oﬃcer accordingly. As a result,
speciﬁc roles and responsibilities are taken into account as
relevant factors.

0

2019

Base year

2020

2021

2022

2030

2050

(FY)

24

Governance

Strategy

Board OversightManagementʼs Role

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Other important metrics and targets related to climatechange are listed here.

SBTs: Start investigation for SBT Certiﬁcation
After submitting a letter of commitment to the SBT
initiative in March 2023, and while drafting the next
Medium-Term Management Plan to be implemented two
years from now, we are now considering updating ourtargets in line with the Science Based Targets (SBT) initiative.

Water Use Metrics and Targets
During the analysis of the Groupʼs climate-related risks
and opportunities, it became clear that climate change andwater use issues are also highly relevant.
To manage the industrial water the Group uses forfacility cooling and processes, we check the dam reservoir
level every day, and adjust water conservation rate according
Along with recirculating cooling water, we use
plants as eﬀectively as possible to conserve water.
For our recirculated cooling water, we use just 100,000
cubic meters of industrial water or less per day, compared to our
total required water usage of 1.5 million cubic meters per day.

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

ammonia is scheduled to begin in FY2025 and beyond. A basic
plan for biomass and ammonia adoption is currently being

Metrics (initiatives) related to internal carbon pricing
In FY2019, Tokuyama adopted internal carbon pricing

implemented, as part of a project sponsored by Japan s Agency(ICP) as a criterion for evaluating investment projects tofor Natural Resources and Energy (FY2023 Oil Supply Structure

promote GHG emissions reduction. Initially, the price of carbon

Advancement Project Cost Subsidy: Project to Promote Transition

was set at 3,700 yen per ton of CO₂, based on the European

to a Stable Supply of Next-generation Fuels).

Union Emissions Trading System (EU-ETS) price. In order toThrough this initiative, the Group aims to achieve afurther enhance our eﬀorts to reduce GHG emissions, inrenewable energy ratio of 30% by FY2030.

FY2022 we raised our internal price of carbon to 10,000 yen

The ratio of renewable energy use for the entire Groupin FY2022 was about 5%.

per ton of CO₂. Using ICP, we will promote activities aimed at
decarbonization over the short and medium term.

Figure 9: Renewable Energy Results and Targets(Total power generated by biomass and ammonia as renewable energy sources)  

Energy consumption (including electricity sold)   
 
 

（TJ）

70000

     

to the reservoir accumulation rate.
condensation water from steam generated at our power

Metrics and Targets

     ­



60000
50000
40000

With our condensation water, we eﬀectively utilize
approximately 25,000 cubic meters per day.
The Groupʼs tap water conservation goal is not toexceed the amount used in the previous year.

30000
20000

Energy consumption targets
Tokuyama Group is aiming to achieve a 50% reduction in

10000

GHG emissions from fuels-derived compared to FY2019 by
FY2030, and it plans to switch to non-fossil fuels (biomass andammonia) for onsite power plants. The rate of co-ﬁring withbiomass will gradually increase starting in FY2025. Co-ﬁring with

0

2019

2020

2021

2022

*Energy generated from waste does not include energy from thermal recycling of heavy oil ash, as well as sludge(organic material, fuel, and valuable combustibles), etc., which are eﬀectively used in the cement production process.

2030(Estimate)

（FY）

25

Governance

Strategy

Board OversightManagementʼs Role

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Scope 1, Scope 2, and, Scope 3
greenhouse gas (GHG) emissions,and the related risks

3.6% from FY2021 through veriﬁcation testing of co-ﬁring

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets(Ten thousand tons-CO₂e)
FY2020

FY2021

FY2022

676

680

651

629 *

632 *

―

４*

２*

4

174 *

177 *

176

Scope 1 (direct emissions)

In FY2022, the Group reached record high sales due

able to reduce Scope 1 and 2 emissions by approximately

Risk ID and Assessment Processes

Table 7: GHG Emissions by Scope Type

Amount excluding electricity and steam sales

to price revisions based on soaring costs for coal and raw
materials. In terms of GHG emissions however, we were

Metrics and Targets

Scope 2 (indirect emissions from energy use)
Scope 3

with biomass and proactive energy-saving activities.

Figure 10: Scope 1 and 2 GHG Emissions

Third-party certiﬁcation has been obtained*underthe SHK system to our Scope 1, 2, and 3

emissions data for FY2020 and 2021. Regarding
to the third-party certiﬁcation for FY2022, see
Table 8 and Figure 11 

    

     

(Ten thousand tons-CO₂e)800   

700
600
500
400
300
200
100
0

2017

2018

  

2019

2020

2021

2022

(FY)

       ­         26

Governance

Strategy

Board Oversight

Risk Management

Risks and Opportunities;

Managementʼs Role

and

Resilience of Strategy

Impact on Organization

Table 8: Scope 1 and 2 GHG Emissions
FY2020

FY2021

FY2022

487.6

460.5

467.7

438.5

25.3

26.5

27.0

32.1

   

     

203.2

   

0.4

   

0.0

   
   

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

0.4
0.0

185.7

Figure 11: Scope 3 GHG Emissions by Category (non consolidated)

0.5
0.0



0.5

 ＊

0.2

680.9

651.5 ＊

1.4

0.9

1.0

1.0

3.1
5.3

   
   

9.8

726.2

Methodology explanation
Scope 1, 2
● Greenhouse Gas Emissions Calculation andReporting Manual (Ver. 4.9) April 2023, Ministry of the

3.7
5.9

10.5

686.5

1.5
6.8
9.3

690.2



3.9
8.3

13.2

664.7

＊

* GHG emissions frombiomass combustion were
310,000 tons-CO₂e＊ Third-party certiﬁcation was
obtained to each total of
Scope 1 and 2 for FY2022

calculating greenhouse gas emissions of speciﬁed emitters) ‒FY2021 Results ‒ Released Jan 24, 2023 by the Ministry of
the Environment and the Ministry of Economy, Trade andIndustry

Scope3● Basic Guidelines on Accounting for Greenhouse Gas  
 ＊ ＊ and Ministry of Economy, Trade and Industry● LCI Database IDEAv2 (for supply chain greenhousegas emissions calculation), Sustainable Management
Promotion Organization (SuMPO), December 2019higher priority for our customers in the selection of raw material
products, there is a risk that our product competitiveness will

Environment and Ministry of Economy, Trade and Industry● Emission Coeﬃcients by Electric Utility (for* Due to rounding, sum ofﬁgures in breakdown does
not become 100%＊Third-party certification was
obtained to the category 1,3
and 4



180.2

676.0

   

     

188.6

716.5


 Risk ID and Assessment Processes（Ten Thousand tons-CO₂e)

FY2019Metrics and Targets

Description of Scope 3 Risks
Physical risk is one type of risk associated with
upstream supply chain activities.
Risk of shutdowns at production facilities for necessary

decline and sales will decrease. As the Group s Electronic
Materials Business Division does a great deal of business withelectronic and electrical companies that are proactive in
addressing environmental issues, the following calculation was
made, based on the assumption of a 10% decline in sales: 91.5

raw materials and fuels due to the eﬀects of intensifying

x 0.1 = 9.2 billion yen (Electronic Materials Business Division

climate change.

sales in FY2022 x Sales decrease rate = Potential impact).

Risks related to logistics include rising logistics costs,

Therefore, we must make greater eﬀorts to reduce GHG

Emissions throughout the Supply Chain (Ver. 2.5) March

driver shortages, and the 2024 problem in the Japaneseemissions and share the information publicly to mitigate the risk

2023, Ministry of the Environment and Ministry of Economy,logistics industry (due to new overtime regulations).

of reduced sales due to insuﬃcient environmental eﬀorts. We

Trade and Industry● Emission Intensity Database for Calculating

The risk for downstream activities is reputation risk.

estimate that by FY2030 approximately 11 billion yen will need

Tokuyama makes many energy-intensive products, which

to be invested in biomass technology along with about 15

Greenhouse Gas Emissions of Organizations Across Supply

it manufactures using electricity and steam from onsite

billion yen in ammonia, so the total mitigation measure cost will

Chains (Ver. 3.3), March 2023, Ministry of the Environment

coal-ﬁred power plants. Once carbon footprint becomes abe 26 billion yen.
27

Governance

Strategy

Board OversightManagementʼs Role

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Targets used by the company to manage
climate-related risks and opportunities
and performance against targets

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Figure 12: FY2050 GHG Emissions Reduction Targets (long-term targets)● 
● 

We have set a long-term goal of becoming carbon
neutral by FY2050. We will accomplish this primarily by
reducing GHG emissions from fuel consumption and raw
materials, and by developing innovative technologies. We
will reduce CO₂ emissions from energy generation, which
accounts for about 70% of our total emissions, by further
promoting energy-saving measures. These include measuresthat have already been implemented while also switching tocarbon-neutral fuels such as biomass and ammonia.
The Group will reduce GHG emissions from raw
materials-derived by reducing the amount of limestone usedin its cement, and by increasing other cement mixture
materials and recycling calcium. We will proceed with
development and introduction of these measures while 
    

‑ 70％­                 

        
  

evaluating the economic eﬃciency. At present, however, itappears that reducing these emissions to zero will bediﬃcult, and CO₂ capture, utilization, and storage (CCUS) will
likely be necessary. The Group will proceed with thedevelopment and introduction of such measures.
While it is our responsibility as a company to steadily‑ 10％

reduce GHG emissions, we also recognize that reducing
GHG emissions through the use of our products in society isalso an important role. In the future, we will contribute to
the achievement of carbon neutrality in the world by‑ 20％

expanding our environment-friendly products and further
developing innovative technologies.

¡¢
­ 

­       


    

 


28

Governance

Strategy

Board Oversight

Risk Management

Risks and Opportunities;

Managementʼs Role

and

Resilience of Strategy

Impact on Organization

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Group is aiming for a 50% reduction in GHG emissions fromemissions by 30% through co-ﬁring with biomass will be 11

fuels-derived (not related to cement) compared to FY2019

billion yen by FY2030. With regard to co-ﬁring with

Figure 13 shows our speciﬁc strategy. The major

by FY2030, and we are currently drafting and implementing

ammonia, we are currently investigating the installation ofsources of the Groupʼs GHG emissions are onsite coal-ﬁredplans to achieve this goal. For co-ﬁring with biomass, we will

relevant equipment. The Group estimates that the total

power plants (GHG emissions from fuels-derived) andstill use palm kernel shells, construction waste and woodinvestment required to reduce GHG emissions by 20% using

cement production (GHG emissions from raw

chips as fuel. However, we are planning to procure biomass

ammonia co-ﬁring will be 15 billion yen by FY2030. As bothmaterials-derived and waste-derived).

fuel and invest in co-ﬁring equipment in order to further

biomass and ammonia co-ﬁring require large amounts ofincrease the level of co-ﬁring starting in FY2025. The Groupinvestment, we plan to make steady progress while assessing

estimates that the total investment required to reduce GHG

economic feasibility and seeking government support.

The Groupʼs medium-term goal is a 30% reduction in
GHG emissions compared FY2019 by FY2030.

Figure 14 shows the details of the lower right corner ofthe graph in Figure 13 (onsite coal-ﬁred power plants). The

Figure 13: GHG Emissions Reduction Plan
(Ten thousand tons-CO₂e)    
    
   

800

­
700

(Ten thousand tons-CO₂e)400   

350

     

300
250

    

600               

200
150
100
50

500

0

2019

2020

2021

2022

2023

2024

400

2028

2029

 

300

 

250

 

200

 


100

0

2019



2020

2021

2022

2030

2050

（FY）

2030 （FY）

 

350

200

2027

    

400       2026



(Ten thousand tons-CO₂e)

300

2025

150
100
50
0

2019

2020

2021

2022

2023

2024

  

2025

2026

2027

2028

2029

2030 （FY）

   ¡¢£ ⬅ ➡ 29

Governance

Strategy

Board Oversight

Risk Management

Risks and Opportunities;

Managementʼs Role

and

Resilience of Strategy

Impact on Organization

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

because there are currently no alternative fuels that arematerial candidates to replace limestone, dramatic

right corner of the graph (cement) in Figure 13. GHG

economically viable, and it wants to reduce its coal use as a

reduction measures are diﬃcult. The Group is now

emissions from fuels-derived in cement production comepriority. Over the long term, the aim is to use hydrogen andinvestigating ways to reduce these emissions per unit ofmainly from coal combustion. Over the short and medium

ammonia as heat sources, and the necessary investigation is

production by increasing the use other materials whileterms, we plan to increase the use of combustible waste,

now being carried out. The Groupʼs GHG emissions fromreducing the amount of clinker (a mix of limestone andespecially waste plastic. Using waste plastic as fuelraw materials-derived arise mostly from limestone (calcium

minerals) per unit of cement.

increases GHG emissions from waste-derived. Nevertheless,carbonate) use. Cement production requires large amounts

the Group intends to increase its combustible waste useof calcium. However, since there are currently no raw

Meanwhile, Figure 15 shows the details of the upper

Figure 14: Reduction Plan for GHG Emissions from fuels-derived(not related to cement production)

Figure 15: Reduction Plan for GHG Emissions from Raw Materials-derived,
Waste-derived, and Fuels-derived (Cement Production)(Ten thousand tons-CO₂e)(Ten thousand tons-CO₂e)

400

400

      




    

350 

 

300

250








200

100

350

   300

           250
Equipment for co-ﬁring withammonia will be installed

Through these measures, we will
gradually replace coal with
non-fossil fuels and reduce GHG
emissions from onsite power plants.

150

200

150

100

50

50

0

We will increase the level of
co-ﬁring using biomass by making
further investment to increase
co-ﬁring capacity starting in FY2025

2019 

2020

2021

2022

2023 2024 2025 2026 2027 2028
      ¡¢£ ⬅ ➡ 2029

2030 （FY）

0

2019

2020

2021

2022

2023 2024 2025 2026 2027 2028
      ¡¢£2029

2030 （FY）

 ⬅ ➡ 30

Governance

Strategy

Board Oversight

Risk Management

Risks and Opportunities;

Managementʼs Role

and

Resilience of Strategy

Impact on Organization

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Here is our approach to achieving carbon neutrality by
FY2050, and a review of our initiatives in FY2022.

Figure 16: the Groupʼs approach toward FY2050 carbon neutrality achievement  


 ₂ ●   
●        ¡  ¡ ●      ₂ 

   *●     ₂ ** Still at feasibility study level 

 

 ●     

   






●         ●           ●   
●  ¤     
●        

 

FY2022●       

FY2030FY205031

Governance

Strategy

Board OversightManagementʼs Role

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

The following details the progress of speciﬁc measures
regarding the Groupʼs initiatives in FY2022.

Technology Development● Green hydrogen
Development of alkaline water electrolyzers
Tokuyama and Nippon Shokubai Co., Ltd. are working
together under a Japanʼs New Energy and Industrial

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

aim of product commercialization by FY2025. For the newhigh-pressure AWEs, we will accelerate our eﬀorts by
utilizing the electrolyzers technology developed by
Tokuyama over many years in its sodium chloride
electrolysis business. In this way, we intend to help promote
the supply of next-generation fuels.

Electrolyzer business base establishedin Yanai City, Yamaguchi PrefectureWith the aim of rapidly commercializing new alkaline

Technology Development Organization (NEDO) frameworkwater electrolyzers that produces hydrogen and oxygen

entitled Joint Problem-Solving Industry-Academia-

using renewable electricity, Tokuyama has established a

Government Collaborative Research and Development

production and development base within the Center for

Project for Rapidly Expanding the Use of Fuel Cells, etc. The

Commercialization of Advanced Technology in Yanai City,

project to develop large-scale alkaline water electrolyzers

Yamaguchi Prefecture.

and separator suitable for high-pressure systems was

An alkaline water electrolyzer is a device that passes

adopted by NEDO as part of its funding of technology

electricity through an alkaline solution to break it down intodevelopment for multi-purpose utilization of fuel cells.

hydrogen and oxygen. Such technology can be used toA high-pressure alkaline water electrolyzer (AWE) is autilize surplus electricity and output ﬂuctuations generated

device that produces hydrogen and oxygen by supplying an

by renewable energy sources and help further expand thealkaline aqueous solution to cells divided by separators andadoption of renewable energy.

electrolyzing water. Hydrogen is attracting attention as a

● Eﬀective use of CO₂(CCU technology development)
Conducting a veriﬁcation test for CO₂ capture
from cement production
Using a CO₂ capture test facility at Mitsubishi Heavy
Industries, Ltd., we conducted a veriﬁcation test of CO₂
capture from cement production exhaust gas.
Going forward, the project team will continue tocalculate investment costs, identify issues, and take
improvement measures based on the knowledge obtained.

              ●      ­ 
●            ¥     

As part of the Groupʼs eﬀorts to help build anext-generation energy source, and expectations are highdecarbonized society, it has been developing alkaline water

worldwide concerning green hydrogen produced fromelectrolyzers (AWEs) that operates under regular pressure,renewable electricity.

with support from Yamaguchi Prefecture. The newly developed

This project combines Nippon Shokubai's

Metrics and Targets

alkaline water electrolyzers utilizes Tokuyamaʼs zero-gap salt

development of a large separator suitable for high-pressure

electrolysis technology and other technologies to achieve thesystems with Tokuyama's development of an internal

best power consumption performance of its kind in the world.

electrolytic cell structure that maximizes separator

Since this device does not require large quantities of precious

performance. The aim is to develop a world-class

metals such as platinum, it is suitable for low-cost large-scale

high-pressure AWEs that is very competitive. The separator

installations. Moreover, compared to electrolyzers of the samedeveloped by Nippon Shokubai will be incorporated into thetype, it has a larger energization area, thereby enabling a highhigh-pressure AWE prototype developed by Tokuyama, andlevel of hydrogen production per unit of installation area.

the project R&D activities will proceed from there.

Through this project, Tokuyama seeks to help build a

Prior to this project, we started to establish ahydrogen supply chain that enables eﬃcient energy use, fromproduction and development site for alkaline waterhydrogen production to utilization. This will help build aelectrolyzers operating under regular pressure at the Centerhydrogen-powered society through renewable energy adoption

for Commercialization of Advanced Technology, with theworldwide and local consumption of local energy production.

        
     

   
                                     

32

Governance

Strategy

Board Oversight

Risk Management

Risks and Opportunities;

Managementʼs Role

and

Resilience of Strategy

Impact on Organization

Feasibility study on methanol production fromCO₂ emissions

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Capture and Utilization.

establish its own CCU technology and accelerate its eﬀorts

The two companies have agreed to promote green

to promote a carbon-neutral society. This is based on the

product adoption by society, in order to lower greenhouseelectricity generated power plants at the Tokuyama Factorywith Mitsubishi Gas Chemical Company, Inc. (MGC) to

gas emissions and help build a decarbonized world. We

using biomass fuel, and the eﬀective utilization of CO₂

conduct a feasibility study concerning the manufacture

have also decided to investigate joint productcaptured from the factory s emissions together withand sale of methanol. The methanol will be produced

commercialization.

hydrogen generated from caustic soda production.

Tokuyama signed a memorandum of understanding

using technology just developed by MGC, while the raw

Once the process under investigation ismaterial CO₂ will be captured from emissions at thecommercialized, it will be the ﬁrst commercial facility inTokuyama Factory, and the raw material hydrogen will be

Japan to use CO₂ captured from factory emissions as acreation of low-carbon product value together with value

produced at the same site. The study will also investigate

raw material for making methanol. The resulting methanolfrom captured carbon in order to promote the further

the use of hydrogen produced using green electricity

will be used by Tokuyama as raw material etc. for its

adoption of green products such as eco-friendly methanol.

generated from biomass.

chemical products, thereby creating green products. By

At the same time, we would like to actively promote a

Methanol is an important substance for making

utilizing MGC's existing methanol distribution network, thecross-industrial initiative that goes beyond the chemicalvarious chemical products. Because it can be manufactured

product can reach customers who need green chemicals,

industry and includes both the public and private sectors.

from captured CO₂, which reduces greenhouse gas

as well as those who need hydrogen and fuels with low

The aim is to help create a domestic market for green

emissions, methanol is expected to be a powerful resource

greenhouse gas emissions.

products made in Japan, while promoting the establishment

Through this feasibility study, Tokuyama aims tofor building a carbon-neutral society through Carbon

        
  

                  



of a CCU industry.

  

 



Through this feasibility study, we seek to promote the   
     
                 33

Governance

Strategy

Board OversightManagementʼs Role

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets● Develop green products
Development of carbon negative concrete
By combining technologies to reduce and capture CO₂

           
    emissions, this concrete eﬀectively reduces exceeding
amount of CO₂ generated during concrete manufacturing.
After joining a carbon negative concrete project as amember of a consortium of 44 private companies, 10       
  

universities, and 1 research institute, Tokuyama has begun
full-scale activities. The Green Innovation Fund Activity* /Concrete Manufacturing Technology Development Project
Using CO₂ is funded by Japanʼs New Energy and Industrial
Technology Development Organization (NEDO).
In this project, we will be responsible for thedevelopment of a concrete admixture that hardens by          
   ¡         ¢     
                          £            

capturing CO₂.
* Green Innovation Fund Project (GI Fund):Toward the goal of achieving carbon neutrality by 2050, the Japanese
government has established a Green Innovation Fund of two trillion yen to
be administered by the New Energy and Industrial Technology
Development Organization (NEDO). The fund provides continuous support
to companies and other organizations that are committed to taking on, as¥  


 
 


   ­¤  

management issues, the challenge of achieving speciﬁc ambitious targets¥   ¥       ­¤   
   

shared by the public and private sectors, from R&D through to¥  


     ¤ ¥   
    
Source: Materials from Kajima Corporation,
Denka Company Limited, and Takenaka Corporation

demonstration to social implementation over the next 10 years.
Project format:
A consortium of over 40 companies, 10 universities, and 1 research institute                             
①

         
  ②       
  

③      

34

Governance

Strategy

Board OversightManagementʼs Role

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Reduction of GHG emissions from fuels-derived,
raw materials-derived, and waste-derived● Use local energy(bamboo and other fast-growing trees)
Participating in Shunan Industrial Complex
Decarbonization Promotion Council
The Shunan Industrial Complex Decarbonization
Promotion Council was established by Shunan City, theSociety for Chemical Engineers Japan, and companies
belonging to the Shunan Industrial Complex (Idemitsu Kosan
Co., Ltd., Nippon Steel Stainless Steel Corporation, Zeon
Corporation, Tosoh Corporation, and Tokuyama). In order tohelp achieve carbon neutrality, the councilʼs aim is to lay out
a vision for decarbonization, and to promote eﬀorts toenable its adoption by society, including relevant technology
development, evaluation, and demonstration, as well as
making policy recommendations. The members of theMetrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Co., Ltd., Tosoh Corporation, and Marubeni Corporation. In
December 2022, the ﬁve parties jointly planted fast-growing
trees in a forest owned by Shunan City. By building asustainable forest management model through

reforestation using fast-growing trees, Tokuyama and its
partners will promote the utilization of local forest resources
and aim for local production of woody biomass for local
consumption.

                
                   
                        
       

     ▶   

▶  

▶ ▶    
 

・ ¦  ・     
・ 
・ 
・§ 

  ▶   
▶¡ 
▶   

  ▶¡ 

* Subsidies for Measures to Promote the Adoption of Non-Fossil Energy Sources (Support Project for Turning an Industrial Complex into a Supply Site for Hydrogen, Ammonia, or Similar Fuels)            
     

●               ●    
           

council all face the new challenge of balancing
decarbonization with the need to maintain and enhance thecompetitiveness of the Shunan Industrial Complex. Several
months after discussions began in February 2022, thecouncil was able to announce at the end of May 2023 a
grand design for the Shunan Industrial Complex to achieveby 2050. Going forward, the council plans to set up
subcommittees to address each theme within the granddesign and proceed with more detailed studies.

Concluding a partnership agreement for theutilization of woody biomass materials

On December 15, 2021, Tokuyama signed anagreement for forest maintenance and the utilization of
woody biomass material with Shunan City, Idemitsu Kosan                          
❷           ª               
①          
②       ❶        

Fast-growing trees: Species that grow faster than Japanese cedar and cypress    
  ­ 
   ¢ £¢ £¨¢ ©£

   
¢ ¨¨¢ ¨
¢ 

35

Governance

Strategy

Board OversightManagementʼs Role

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Switching to the Yamaguchi Ishin Denki:
Yamaguchi Hydropower 100 Plan to secure CO₂
emissions-free hydroelectricity
In April 2022, the Center for Commercialization of

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Blue carbon oﬀset

beds near the Oshima tidal ﬂat is certiﬁed as J-Blue Credits.

Tokuyama is participating in the Tokuyama Kudamatsu

Through purchase and utilization of these credits, the GroupPort and Oshima Tidal Flat Blue Carbon Oﬀset Program,can oﬀset GHG emissions from its production activities. In

which utilizes J Blue Credits issued by the Japan BlueFY2022, we purchased credits equivalent to 3.8 tons of CO₂.

Advanced Technology (Yanai City, Yamaguchi Prefecture)

Economy Association (approved by the Minister of Land,

began procuring emissions-free electricity under the

Infrastructure, Transport and Tourism).

By supporting activities to conserve marine
ecosystems through this Blue Carbon Oﬀset Program, theYamaguchi Ishin Denki: Yamaguchi Hydropower 100 Plan,

Blue carbon describes the type of carbon that iswhich was repeated by the Ogo Mining oﬃce (Kumage-gun,sequestered when carbon dioxide in the atmosphere isbeautiful, thriving natural environments from the mountains

Yamaguchi Prefecture) in May.

absorbed by marine organisms such as seaweed. It is now

to the sea.

As a result of switching to this plan by the Center forCommercialization of Advanced Technology and Ogo Mining

attracting attention as a new option for CO₂ capture.
Under the Tokuyama Kudamatsu Port and Oshimaoﬃce, Tokuyama reduced its CO₂ emissions by

Tidal Flat Blue Carbon Oﬀset Program, the amount of CO₂

approximately 2,300 tons in FY2022.

captured as a result of activities to conserve the seaweed

Group is helping to build a sustainable world based onBlue carbon:
A type of carbon capture where carbon dioxide in the atmosphere isabsorbed and sequestered by marine organisms such as seaweed. It is
attracting attention as a new option for CO₂ capture.

The Yamaguchi Hydropower 100 Plan was establishedby the Yamaguchi Prefecture and the Chugoku ElectricPower Company, Inc. to promote local consumption of         

locally generated renewable energy. The plan enables
companies in Yamaguchi prefecture to procure renewableenergy generated at hydroelectric power plants owned by
the prefecture, thereby supporting initiatives to reduce CO₂
emissions.

            

    

          ¤

            
 
 

        

36

Governance

Strategy

Board OversightManagementʼs Role

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets● Use biomass/ammonia/hydrogenas mono-fuel or in combination with otherfuels, use renewable energy

Japan's ﬁrst ammonia supply chain and are taking various

Power Plants: shift from coal tobiomass/ammonia/hydrogen                    

2023, and is currently in its second phase, with further

actual equipment.

investigation underway.

The Project for Basic Investigation of Ammonia Supply
adopted by Japanʼs Ministry of Economy, Trade and Industry
and the Agency for Natural Resources and Energy as part of
Adoption of Non-Fossil Energy Sources (Support Project for
Turning an Industrial Complex into a Supply Site for
Hydrogen, Ammonia, or Similar Fuels).

  ¥    ¥§£  ¥   ¥ Hydrogen, Ammonia, or Similar Fuels). In response to thisprogram, Idemitsu Kosan Co., Ltd., Tosoh Corporation,
Tokuyama Corporation, and Zeon Corporation jointly
proposed a Project for Basic Investigation of Ammonia





Turning an Industrial Complex into a Supply Site for       
    
     ¥  

Supply Site Development at the Shunan Industrial Complex,
which was accepted.
This project aims to investigate the establishment of azero-carbon system to supply more than one million tons ofammonia per year at the Shunan Industrial Complex by
2030. The investigation covers use of the storage facility at
the Tokuyama Factory of Idemitsu Kosan for development asa shared ammonia supply site for the Shunan Industrial
Complex, and the building of an ammonia supply
infrastructure for each company in the complex (demandside). Moreover, based on this project, the four participatingcompanies propose constructing in the Shunan region­         

 

      
   






Adoption of Non-Fossil Energy Sources (Support Project for¢

provides Energy Subsidies for Measures to Promote the        
        

 Japanʼs Ministry of Economy, Trade and Industry andthe Agency for Natural Resources administer a program that¬    ¦  §  ®

  
   ¦ ¥  

Site Development at the Shunan Industrial Complex wasa program of Subsidies for Measures to Promote theThis project is to be completed by the end of March

initiatives such as demonstrating ammonia combustion using  

        

▶               

▶       

    ▶              «   

«   

Source: Advisory Committee for Natural Resources and Energy, 5th Meeting; joint meeting of the Hydrogen Policy Subcommittee of the Energy Conservation and New Energy Sectional Committee
together with the Ammonia and Other Decarbonized Fuel Policy Subcommittee of the Resources and Fuels Sectional Committee

37

Governance

Strategy

Board OversightManagementʼs Role

Risk Management

Risks and Opportunities;
andResilience of Strategy

Impact on Organization

Metrics and Targets

Risk ID and Assessment Processes

Climate-related Metrics

Risk Management Processes

Scope 1, 2, 3 GHG Emissions

Integration into Overall Risk Management

Climate-Related Targets

Eﬃciently utilize biomass combustion ash
and CCS
Since combustion ash (ﬂy ash) discharged by biomass
power plants contains potassium and other elements, its use
in cement production is limited. Therefore, technology needs
to be developed for eﬀective utilization of this material.
For this joint research with ITOCHU ENEX Co., Ltd.,
using Tokuyama technology still under development, we aim¢      

to utilize biomass ﬂy ash that has adsorbed CO₂ to make aconstruction material product (trademark: Recycle Beads).

   

The goal is to create a method for CO₂ capture and storage
that can be widely adopted.

¡ ¯ ©°    ±  

Distribution

According to an initial study by both companies, thecalcium oxide (CaO) contained in ﬂy ash can adsorb CO₂,
which can then be used to make Recycle Beads. It is clearthat this process can capture more CO₂ than is emitted     

  

during the manufacturing of Recycle Beads.

・   
・    ・   
・  

Going forward, we will continue our research toenable low-cost adsorption and capture of more CO₂, withthe goal of developing a construction material that can 

adsorb 10% or more of the CO₂ emitted by the manufactureof all products.
Through these eﬀorts, both companies are helping tobuild a decarbonized, recycling-oriented society.
* CCS (Carbon dioxide Capture and Storage)* Recycle Beads is a roadbed material and weed control product producedby KANOU FA Co., Ltd., a company in which ITOCHU ENEX Co., Ltd. has a
49% stake.

RB
Recycled Beads

Presented by ITOCHU ENEX

38