October 26, 2021

Demonstration Project Begins for Commercialization ofVessels Equipped with Domestically Produced AmmoniaFueled Engine-- Utilizing the Japanese Government’s Green Innovation Fund -NYK Line
Japan Engine Corporation
IHI Power Systems Co., Ltd.
Nihon Shipyard Co., Ltd.
Nippon Kaiji Kyokai (ClassNK)
NYK Line, Japan Engine Corporation, IHI Power Systems Co., Ltd., and Nihon
Shipyard Co., Ltd. (i.e., “the Companies”) are pleased to announce that Japan’s
New Energy and Industrial Technology Development Organization (NEDO) has
approved the Companies’ participation in a demonstration project for thecommercialization of vessels equipped with a domestically produced ammoniafueled engine as part of the Green Innovation Fund project.* The demonstration
project, which is scheduled to begin in December with ClassNK added to theCompanies, aims to use ammonia as fuel to significantly reduce greenhousegas (GHG) emissions during voyages and thus introduce an ammonia-fueledvessel for the good of society earlier than 2030. The Companies will eventuallywork toward the goal of achieving zero emissions from ships in the future.
Target
The Companies and ClassNK's greatest goals are to realize the development ofan ammonia-fueled vessel that is internationally competitive ahead of othercountries, and to lead the development of safety guidelines and laws andregulations related to ammonia-fueled vessels. In order to achieve these goals,
marine engine manufacturers, shipyards, class societies, and shipping
companies in Japan will work together to consistently cooperate from theresearch and development stage to engine development, shipbuilding, andcommercialization.

Background
With the entry into force of the Paris Agreement in 2016, the global momentum
for decarbonization is increasing. The Japanese government has declared that it
will reduce GHG emissions to zero as a whole by 2050 and aim for carbon
neutrality, and the energy shift toward the realization of a carbon-free society isaccelerating. Reducing GHG emissions is also an urgent issue in the shipping
industry, and research and development is being conducted to convert marine
fuel from conventional heavy fuel oil to liquefied natural gas (LNG) and to
popularize next-generation zero-emission fuels such as hydrogen and ammonia.
Ammonia does not emit carbon dioxide (CO2) even when burned, so it is expected
to be a next-generation fuel that contributes to global warming countermeasures.
Furthermore, it is said that by utilizing CO2-free hydrogen** for hydrogen, whichis the raw material for ammonia, it is possible to achieve zero emissions in
consideration of the fuel life cycle.
Under this background, Japan’s Ministry of Economy, Trade and Industry started
the Green Innovation Fund project toward carbon neutrality by 2050, and NEDO
has now approved the Companies' development of vessels equipped with adomestically produced ammonia-fueled engine as part of the Green Innovation
Fund project.
Overview of demonstration project and the roles of Companies
NEDO has approved these demonstration projects, (1) the development andoperation of an ammonia-fueled tugboat and (2) the development and operationof an ammonia-fueled ammonia gas carrier, and the companies will carry themout.
(1) Development and operation of an ammonia-fueled tugboat (A-Tug)
The ammonia fuel will have a flame retardant bottleneck, which is difficult to ignite,
so this project assumes that a small amount of fuel oil will be used as pilot fuel.
Targeting the delivery of A-Tug in FY2024, the companies aim to reduce GHG
emissions by achieving an ammonia fuel mixed combustion rate of 80% or higher.
The companies will confirm safe operation in demonstrations aimed to improvethe mixed combustion rate with a view to achieving zero GHG emissions by usingbiofuel as a pilot fuel in the future.
NYK Line
IHI Power Systems Co., Ltd.
Nippon Kaiji Kyokai (ClassNK)

Project management, ship design andlegal compliance
Research and design of four-stroke
engine***Safety assessment of A-Tug

Image of A-Tug(2) Development and operation of an ammonia-fueled ammonia gas carrier(AFAGC)
Targeting the ship’s delivery in FY2026, the Companies will develop and operate
an ammonia-fueled ammonia gas carrier (AFAGC) with the concept oftransporting ammonia as cargo and using the cargo and ammonia gas vaporizedfrom the cargo as fuel during the voyage.
The Companies aim to reduce GHG emissions by achieving a maximum
ammonia fuel mixed combustion rate of 95% for the main engine that moves theship, and an ammonia fuel mixed combustion rate of 80% or more for the auxiliary
engine that runs the generator.
NYK Line
Japan Engine Corporation
IHI Power Systems Co., Ltd.
Nihon Shipyard Co., Ltd.

Project management, ship design andlegal compliance
Research and design of two-stroke
engine (main engine)****
Research and design of four-stroke
engine (auxiliary engine)
Development of hull, examination of shipconstruction method
Nippon Kaiji Kyokai (ClassNK)

Safety assessment of AFAGC

Image of AFAGC

Schedule
Period: December 2021 to the end of March 2028

Demonstration project schedule

Overview of each company＜NYK Line＞
Headquarters: Tokyo
President: Hitoshi Nagasawa
Website: https://www.nyk.com/english/

＜Japan Engine Corporation＞

Headquarters: HyogoPresident: Ken Kawashima
Website: https://www.j-eng.co.jp/en/index.html＜IHI Power Systems Co., Ltd.＞

Headquarter: Tokyo
President: Masao Akamatsu
Website: https://www.ihi.co.jp/ips/english/index.html＜Nihon Shipyard Co., Ltd.＞
Headquarter: Tokyo
President: Yoshinori Maeta
Website: https://www.nsyc.co.jp/en/＜Nippon Kaiji Kyokai (ClassNK)＞

Headquarter: Tokyo
President & CEO: Hiroaki Sakashita
Website: https://www.classnk.com/
Inquiry contact details
NYK Line
Corporate Communication Group, Media Relations Team, Mr. Misawa
Telephone: +81-3-3284-5177; email: NYKJP.ML.MEDIA@nykgroup.com
Japan Engine Corporation, General Affairs & Public Relations Section
Telephone: +81-78-949-0800; email: pr_info@j-eng.co.jp
IHI Corporation, Media Relations & Investor Relations Group,Corporate Communication Division, Mr. Kobayashi
Telephone: +81-3-6204-7030; email: kobayashi4642@ihi-g.com
Nihon Shipyard Co., Ltd., General Affairs Group, Administration Dept.
Telephone: +81-45-212-8205; email: info@nsyc.co.jp

Nippon Kaiji Kyokai (ClassNK),Public Relations Team
Telephone: +81-3-5226-2047; e-mail: eod@classnk.or.jp
NEDO press release
Please refer to the following link for the NEDO press release.
https://www.nedo.go.jp/news/press/AA5_101487.html (Japanese)* Green Innovation Fund projectA 2 trillion yen fund created in NEDO to significantly accelerate current efforts suchas structural transformation of the energy and industrial sector and innovation
through bold investment toward carbon neutrality by 2050. The fund provides
continuous support from R&D and demonstration to social implementation for up
to 10 years for companies that share ambitious and concrete goals with the publicand private sectors and tackle them as management issues. NEDO provides
support mainly in 14 priority areas for which action plans are being formulated in
the green growth strategy.
** CO2-free hydrogen
One way of producing hydrogen without generating CO2 is through the use ofrenewable energy. A second way is by using natural gas or coal together withcarbon capture and storage. CO2-free ammonia synthesis is technology forsynthesizing ammonia using such CO2-free hydrogen.

*** Four-stroke engine
An engine that performs the four basic processes (intake, compression,combustion/expansion, and exhaust) of a reciprocating engine while thecrankshaft makes two rotations (the piston makes two reciprocating movements,

that is, four strokes). The four-stroke engine is used for marine propulsion andpower generation because it has a wide output range that can be handled by
setting the bore diameter and rotation speed.
**** Two-stroke engine
An engine that burns once per rotation of the engine (one reciprocation of thepiston) and is characterized by a small number of parts, light weight, andcompactness. The two-stroke diesel engine installed as the main engine of a large
ship is equipped with an exhaust gas turbocharger and has an ultra-long stroke
structure, which achieves thermal efficiency of over 50% and low rotation / highoutput. It raises propeller efficiency and contributes to the energy-saving operationof ships.