ANNEX - SECOND PARTY OPINION
NYK LINE
NYK GREEN BOND (#2)

Prepared by: DNV Business Assurance Japan K.K.
Location: Kobe, Japan
Date: 29 March 2024
Ref. Nr.: PRJN‐716481-2024-ANX-GB2-JPN-1

This opinion is prepared based on the NYK Green/Transition Finance Framework Second Party Opinion(hereinafter, "Master SPO") (Ref. Nr.: PRJN-258246-2021-AST-JPN-Rev.1 *25 January 2024), which wasassessed against to the NYK Green/Transition Finance Framework (hereinafter, “Framework”).
*For more information on the ANNEX - Second Party Opinion, see following DNV website
https://www.dnv.jp/news/page-227965 Release of a new evaluation service (Master SPO+ANNEX).

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Executive Summary
DNV Business Assurance Japan K.K. (hereinafter, "DNV") confirmed that the NYK Green
Bond (#2) issued by Nippon Yusen Kabushiki Kaisha, also known as NYK Line (hereinafter,“NYK”), meets the various principles and guidelines requirements for such bond issuance andis planned to be issued and managed through appropriate internal processes based on the
Framework*1, which has been assessed its eligibility*2.
*1: NYK Green/Transition Finance Framework*2: NYK Green/Transition Finance Framework Second Party Opinion

Table-1 shows an outline of the NYK Green Bond (#2) and ANNEX - Second Party Opinion.
The additional items to be assessed in the ANNEX - Second Party Opinion are Principle-1(Use of Proceeds) and Principle-4 (Reporting) which are under the bonds with specific use ofproceeds (response to the four principles), as well as opinion against the technical criteria of
Climate Bonds Initiative (CBI). The conformity of the other principles to the criteria has
already been assessed its eligibility in accordance with the Framework.

Table-1 NYK Green Bond (#2) ANNEX - Second Party Opinion
Target finance

NYK Green Bond (#2)

Target organization

NYK Line

Target framework

NYK Green/Transition Finance Framework

Targeted external

NYK Green/Transition Finance Framework Second Party Opinion

review

Ref. Nr.: PRJN-258246-2021-AST-JPN-Rev.1 Issued on 25 January, 2024
Criteria for the use of proceeds bondTarget criteria-

Green Bond Principles (ICMA, 2021)-

Green Bond Guidelines (MoE, 2022)-

Shipping Criteria version 1b (CBI, 2020)
Principle-1-

Confirmed reliance on Framework. Additional
assessment was implemented as follows:(Use of proceeds)-

Ammonia-fuelled ammonia carriers-

Confirmed reliance on Framework-

Confirmed reliance on Framework-

Confirmed reliance on Framework. Additional

Principle-2(Process for project
Bonds with specificevaluation anduse of proceeds

selection)(response to the fourPrinciple-3

elements)(Management ofproceeds)
Principle-4(Reporting)assessment was implemented as follows.
-

Status of fund allocation: allocated, unallocated andrefinanced amounts

Page 2 of 16-Environmental benefits: Number and specificationsof ammonia-fuelled vessels

As an external reviewer, DNV assessed the NYK Green Bond (#2) in terms of the use ofproceeds and reporting eligibility, based on an evaluation of the Framework and otherrelevant documents provided by NYK. DNV also confirmed that the other items are inaccordance with the Framework.

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Contents
Executive Summary

2

I. Scope and Objectives

5

II. Responsibilities of NYK and DNV

6III. Basis of DNV’s Opinion

7

IV. Work Undertaken

8

V. Findings and DNV's Opinion

9

VI. Assessment Conclusion

15

Schedule-1 NYK Green Bond (#2) Eligible Projects

16

Revision history
Date of issue
29 March 2024

Remarks
Prepared and issued as NYK Green Bond (#2) ANNEX - Second Party
OpinionDisclaimer
Our assessment relies on the premise that the data and information provided by Issuer to us as part of our review procedures have been provided in good faith.
Because of the selected nature (sampling) and other inherent limitation of both procedures and systems of internal control, there remains the unavoidable riskthat errors or irregularities, possibly significant, may not have been detected. Limited depth of evidence gathering including inquiry and analytical procedures andlimited sampling at lower levels in the organization were applied as per scope of work. DNV expressly disclaims any liability or co-responsibility for any decision aperson or an entity may make based on this Statement.

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

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

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I. Scope and Objectives
DNV has been commissioned by NYK to conduct a pre-issuance assessment of the NYK
Green Bond (#2) to evaluate whether NYK meets the criteria for bonds with specified use ofproceeds as defined in the GBP/GBGLs and to provide ANNEX - Second Party Opinion
regarding the eligibility of the Green Bond.
As an independent external reviewer, DNV declares that it has no factual or perceived
conflict of interest in providing ANNEX - Second Party Opinion for NYK.
Furthermore, this report does not provide any assurances regarding the financial
performance, value of any investments, or the long-term environmental benefits of any
Green Bonds issued under this Framework.
(1) Scope of review*
The review assessed the following elements and confirmed their alignment with four core elements in GBP.
☒

Use of proceeds☐

Process for Project Evaluation and Selection☐

Management of proceeds☒

Reporting* DNV has already reviewed "Process for Project Evaluation and Selection" and "Management of Proceeds"of GBP/GBGLs and has delivered our opinion below.
“NYK Green/Transition Finance Framework Second Party Opinion“
Ref. Nr.: PRJN-258246-2021-AST-JPN-Rev.1 Issued 25 January, 2024

(2) Role(s) of review provider☒

Second Party Opinion☐

Certification☐

Verification☐

Ratings☐

Other (please specify):(3) Standards/guidelines to be applied
No.

Standards/guidelines

Scheme owner

1.

Green Bond Principles (GBP)

International Capital Market Association(ICMA), 2021

2.

Green Bond Guidelines (GBGLs)

Ministry of the Environment, 2022

3.

Shipping Criteria version 1b (sector technical criteria)

Climate Bonds Initiative (CBI), 2020

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II. Responsibilities of NYK and DNV
NYK has provided the information and data used by DNV in this review. DNV's ANNEX Second Party Opinion represents an independent opinion and is intended to inform NYK and
its stakeholders as to whether the NYK Green Bond (#2) meets the established criteria,
based on the information provided to us. In our work we have relied on the information andfacts presented to us by NYK. DNV is not responsible for any aspect of the nominatedprojects and assets referred to in this opinion and assumes no responsibility for any
inaccuracies in any facts, findings, opinions or conclusions. Thus, DNV shall not be held liable
if any of the information or data provided by NYK and used as a basis for this assessment
was not accurate or complete.

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III. Basis of DNV’s Opinion
To provide a more flexible ANNEX - Second Party Opinion for the issuer, NYK, DNV identified
the key assessment targets and carried out assessments in accordance with its procedures.
DNV, as an independent external reviewer, provides ANNEX - Second Party Opinion
according to the protocol.
Our Protocol includes a set of suitable criteria that can be used to underpin DNV’s opinion.
The overarching principle behind the Green Bond with a use of proceeds bond as the basis
for the opinion are as follows:“enable capital-raising and investment for new and existing projects with environmental
benefits"

As per our Protocol, the criteria against which the NYK Green Bond (#2) has been grouped
into the four common elements of GBP/GBGLs, as shown below.
The additional assessment for this ANNEX - Second Party Opinion covers Principle 1 and 4
out of the four common elements of GBP/GBGLs.
Principle 2 and 3 have already been assessed for eligibility. Detailed results of the eligibility
assessment can be found in the "NYK Green/Transition Finance Framework Second Party
Opinion" (Ref. Nr.: PRJN-258246-2021-AST-JPN-Rev.1 25 January, 2024).

(1) Four elements of GBP/GBGLs
Principle One: Use of proceeds *Subject to additional assessment of ANNEX – Second Party
OpinionThe Use of Proceeds criteria are guided by the requirement that an issuer of a green bond must
use the funds raised to bond eligible activities. The eligible activities should produce clear
environmental benefits.

Principle Two: Proceeds for Project Evaluation and Selection
The Project Evaluation and Selection criteria are guided by the requirements that an issuer of agreen bond should outline the process it follows when determining eligibility of an investment using
the proceeds from green bond, and outline any impact objectives it will consider.

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

Principle Four: Reporting *Subject to additional assessment of ANNEX - Second Party Opinion
The Reporting criteria are guided by the recommendation that at least Sustainability Reporting to
the bond investors should be made of the use of bond proceeds and that quantitative and/or
qualitative performance indicators should be used, where feasible.

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IV. Work Undertaken
Our work constituted a comprehensive review of the available information, based on theunderstanding that this information was provided to us by the issuer in good faith. We havenot performed an audit or other tests to check the veracity of the information provided to us.
The work undertaken to form our opinion included:i. Pre-issuance assessment (ANNEX - Second Party Opinion)•

Assessment of additional documentary evidence provided by NYK on this Bond andsupplemented assessment by a comprehensive desktop research. These checks refer
to current assessment best practices and standards methodologies;•

Discussions with NYK, and review of relevant documentation;•

Documentation of findings against each element of the criteria to be additionallyassessed.

ii. Post-issuance assessment (periodic review) (*not included in this report)•

Interviews with NYK managers and review of relevant documentation;•

Site surveys and inspections (if required);•Documentation of post-issuance assessment results.

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V. Findings and DNV's Opinion
DNV's findings and opinion are as described below. Please see Schedule-1 for details.

GBP・GBGLs-1.

Use of Proceeds

NYK has defined the criteria applied to eligible projects as green projects which meet
relevant frameworks (GBP and GLGLs) and technical criteria such as CBI.
The proceeds of the NYK Green Bond (#2) will be used for the R&D and construction ofammonia-fuelled ammonia carriers. Please see Schedule-1 for details.
The R&D and construction of ammonia-fuelled ammonia carriers as a use of green bondproceeds is a green eligible project that is aligned with the NYK Green/Transition Finance
Framework and the NYK Group ESG Story 2023, and is expected to meet the CBI technicalcriteria.
The maximum amount of proceeds of the NYK Green Bond (#2) is expected to total JPY 10
billion. DNV confirmed at the time of this assessment that the proceeds will be used for new
investments and partly as refinancing. The actual allocation results will be reported on anannual basis in accordance with GBP/GBGLs-4.Reporting.

Project: Partial funding for the R&D and construction of ammonia-fuelled ammonia
carriers-

The R&D and construction of ammonia-fuelled ammonia carriers is a green project that isessential to achieving the 2050 Net Zero target set out in the "NYK Group ESG Story
2023." The NYK Group ESG Story sets a plan to accelerate initiatives to reduce GHG
emissions from 2030 onwards with alternative fuels (see Figure-1). The development,
construction, and operation of ammonia-fuelled vessels are essential to accelerating GHG
emissions reduction with alternative fuels (see Figure-2).

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Figure-1 Two tactics to reduce GHG emissions(Source: NYK Group ESG Story 2023)

Figure-2 Accelerating GHG emissions reduction through the use of alternative fuels(Source: NYK Group ESG Story 2023)

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Figure-3 Ammonia-fuelled ammonia carrier (image)-The ammonia-fuelled ammonia carrier is expected to be completed by the end of
November 2026, while the project period, including the establishment of related
technology, is scheduled from January 2022 to around March 2028.
Table-2 Summary ammonia-fuelled ammonia carriers
Project Name:
Estimated allocation:

Ammonia-fuelled ammonia carriers (AFMGC*1)
Approx. JPY 10 billion

Total length:180.00 m

Mould width:

32.00 mMould depth:

18.45 mLoading capacity:

Approx. 40,000 m3

Gross tonnage:

Approx. 30,000 tonnes

Scheduled completion:

End of November 2026

Estimated environmental
benefits:

Main engine: Maximum 95% co-firing rate
Auxiliary engine: At least 80% co-firing rate
Aim for a GHG reduction rate of at least 80% for
the vessel as a whole.

*1 AFMGC: Ammonia-fuelled Medium Gas Carrier

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-Ammonia-fuelled ammonia carriers are currently in the research and development phasetowards realization, a summary of which is given in Table-2. Based on the testing of themain and auxiliary engines using demonstration equipment or actual equipment, DNV
has confirmed that the required technical criteria are likely to be met throughout theterm of this Bond by the CBI technical criteria (Shipping Criteria version 1b).
Furthermore, considering that ammonia-fuelled ammonia carriers are currently in thedevelopment phase of the planned ammonia co-firing technology, further GHG emission
reductions could be achieved through further technological developments.

-

The target project is dual-fuelled vessels (fuel oil and ammonia), and is designed to allow
for future conversion of fuel oil to biofuel and ammonia to blue or green ammonia etc.
DNV has confirmed that the vessel is planned to consistently meet the CBI technicalcriteria throughout the expected operational life of vessels.

Based on the information provided by NYK, DNV has confirmed that the target project meets
GBP, GBGLs, and the relevant CBI technical criteria.

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GBP・GBGLs-4.

Reporting

DNV confirmed that NYK will report (annual reporting) on the Green Bond (#2) until theproceeds are fully allocated, and disclose information on the status of the allocation, theprojects to which the proceeds have been allocated or the environmental benefits on theissuer’s website.
DNV confirmed that, even after allocation have been completed, NYK plans to report any
major changes in the allocation plan or project implementation status, in a timely manner in
NYK’s reporting.
<Allocation status>•

Allocated amount•

Balance of unallocated amount•

Approximate amount of the proceeds allocated for refinancing<Environmental benefits> * Any or all of the following will be disclosed
Project

Reporting item
・ Introduction record (number of vessels) and specifications of SEP and
CTV・ Location, cardinal numbers and capacity (kW) of introduced offshore
wind power generation
・ Cardinal numbers and capacity (kW) of introduced wind power
generation
・ Capacity of Solar PVs (kW)01Offshore Wind Power

02

Green Terminal

03

Ammonia fuelled vessel

・ Numbers and main specifications of ammonia fuelled vessels

04

Hydrogen fuelled cell
vessel・ Numbers and main specifications of Hydrogen fuelled cell vessels

05

LNG fuelled vessel

06

LNG fuel supply vessel07

LPG fuelled vessel

08

Operation efficiency &optimization

・ Number and main specifications of LNG fuelled vessels
・ GHG emissions (mt/vessel/year)
・ GHG ・ CO2 ・ SOx ・ NOx emission reduction amount or ratio comparedto the case of using HFO (heavy fuel oil)・ Number and main specifications of LNG fuel supply vessels
・ GHG emissions (mt/vessel/year)
・ GHG ・ CO2 ・ SOx ・ NOx emission reduction amount or ratio comparedto the case of using HFO (heavy fuel oil)・ Number of LPG fuelled vessels ・ Main specifications
・ GHG emissions (mt/vessel/year)
・ GHG ・CO2 ・ SOx ・emission reduction amount or ratio compared tothe case of using HFO (heavy fuel oil)・ GHG / CO2 / SOx / NOx emission reductions or ratios before and after
the introduction of equipment and systems compared to standard
operations

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Use of Proceeds reporting:☒

Project-by-project☐

On a project portfolio basis☐

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

Information reported:☒

Allocated amounts☐

Other (please specify):☐

GB refinanced share of total investment

Frequency:☒

Annual☐Other (please specify):☐

Semi-annual

Impact reporting (Environmental Impact):☒

Project-by-project☐

On a project portfolio basis☐

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

Frequency:☒

Annual☐☐Other (please specify):

Semi-annual

Information reported (expected or ex-post):☒

GHG Emissions / Savings☐☒

Other ESG indicators (please specify):

Energy savings

Number and specifications of ammoniafuelled vessels

Means of Disclosure:☐

Information published in financial☐

report (Integrated Report)☐

Information published in ad hoc

Information published in sustainability
report☒Other (please specify): on NYK website

documents☐

Reporting reviewed (if yes, please specify which parts of the reporting are subject to external
review)

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VI. Assessment Conclusion
On the basis of the information provided by NYK and the work undertaken, it is DNV’sopinion that the NYK Green Bond (#2) meets the criteria established in the Protocol, andthat is aligned with the following stated definition or purpose of Green Bonds that specify theuse of proceeds within the GBP/GBGLs:“enable capital-raising and investment for new and existing projects with environmental
benefits”
DNV Business Assurance Japan K.K.
29 March 2024

Masato Kanedome

Naoki Maeda

Technical Reviewer

Managing Director/SCPA Vice President

DNV Business Assurance Japan K.K.

DNV Business Assurance Japan K.K.

Jun Chokai

Kazumasa Terada

Project Leader

Assessor

DNV Business Assurance Japan K.K.

DNV Business Assurance Japan K.K.

About DNV
Driven by our purpose of safeguarding life, property and the environment, DNV enables organisations to advance thesafety and sustainability of their business. Combining leading technical and operational expertise, risk methodology andin-depth industry knowledge, we empower our customers’ decisions and actions with trust and confidence. We
continuously invest in research and collaborative innovation to provide customers and society with operational andtechnological foresight.
With our origins stretching back to 1864, our reach today is global. Operating in more than 100 countries, our 16,000
professionals are dedicated to helping customers make the world safer, smarter and greener.
Disclaimer
Responsibilities of the Management of the Issuer and the Second-Party Opinion Providers, DNV: The management ofIssuer has provided the information and data used by DNV during the delivery of this review. Our statement represents
an independent opinion and is intended to inform the Issuer management and other interested stakeholders in the Bond
as to whether the established criteria have been met, based on the information provided to us. In our work we haverelied on the information and the facts presented to us by the Issuer. DNV is not responsible for any aspect of thenominated assets referred to in this opinion and cannot be held liable if estimates, findings, opinions, or conclusions areincorrect. Thus, DNV shall not be held liable if any of the information or data provided by the Issuer’s management andused as a basis for this assessment were not correct or complete

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Schedule-1 NYK Green Bond (#2) Eligible Projects
Project Overview
Category*1

Project*1

Project
Name

Total length
Target for
Allocation/ Mould

Loading

width /

capacity /Mould

Gross tonnage

Scheduled

Expected Environmental
Benefits

Completion

depth
Main engine: Maximum 95%
Expenditure on

Ammonia-

Partial funding

ammonia gas

fuelled ammonia

for the R&D

carriers mainly

carriers

andfuelled by(AFMGC)

construction

180.00 m /Approx. 40,000
332.00 m /m / Approx.

18.45 m30,000 mt

Scheduled
for the endof November
2026

ammonia (incl.
investment,

fuelledresearch andvesseldevelopment,

Auxiliary engine: At least 80%
co-firing rate
Aim for a GHG reduction rateof at least 80% for the vessel
as a whole.

capitalAmmonia-

co-firing ratebusinessdevelopment
andoperations,working
capital)Ammonia-fuelled ammonia carrier*1: Excerpted from the NYK Green/Transition Finance Framework
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