No .MTI20220039

for 9th Cloud Computing Day Tokyo

Carbon Neutral Strategy

18 November 2022
Carbon Neutral Strategy Office

Mitsubishi Heavy Industries, Ltd.
© Mitsubishi Heavy Industries, Ltd. All Rights Reserved.

Table of Contents

 About us MHI Group MISSION NET ZERO
 MHI Group’s Carbon Neutral Strategy
 Carbon Neutrality in MIHARA WORKS© Mitsubishi Heavy Industries, Ltd. All Rights Reserved.

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About MHI Group© Mitsubishi Heavy Industries, Ltd. All Rights Reserved.

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MHI Group at a glance© Mitsubishi Heavy Industries, Ltd. All Rights Reserved.

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History and Future of our business solutions

Various solutions in response to socialchallenges since 1884..

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Present & Future

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MISSION NET ZERO

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MHI Group Declares MISSION NET ZERO
 MHI Group’s carbon footprint, which is mostly Scope 3, has remained around
1.5 billion ton-CO2/year across our operations
 In October 2021, MHI declared bold targets to achieve carbon neutrality underthe banner – MISSION NET ZERO
 MHI aims to achieve carbon neutrality throughout our operations and value
chain by 2040

 At MHI Group carbon neutrality is integral to our growth strategy
 We are proposing proven products and services to help our customers
achieve their carbon reduction goals
 To accelerate development of emerging carbon neutral technologies, first
we are deploying new solutions to make our own factories carbon neutral© Mitsubishi Heavy Industries, Ltd. All Rights Reserved.

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MISSION NET ZERO Targets

Target YearReduce CO2 emissions
across MHI Group
Scope 1&2

Reduce CO2 emissions
across MHI’s value chain
Scope 3 + reductions from CCUS

2030

-50% (compared to 2014)-50% (compared to 2019)

2040

Net Zero

Net Zero

Scope 1&2: The calculation standard is based on the GHG Protocol.
Scope 3: The calculation standard is based on the GHG Protocol. However, we also account for reductions achieved by CCUS as an MHI original index.
GHG: Greenhouse Gas

CCUS: Carbon dioxide Capture, Utilization and Storage*As CO2 comprises 99% of MHI Group’s GHG emissions, we have focused our targets solely on the reduction of CO2 in order to simplify our message.
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Roadmap to MISSION NET ZERO

1,000

Reduce CO2 emissions across MHI Group
Scope 1&2

Reduce CO2 emissions across MHI’s value chain
Scope 3 + reductions from CCUS

Implement proprietary
technologies at MHI factories

Rapidly establish decarbonization
technologies and drive commercialization

kton CO2

Mton CO2
1,500(reference)
1.2 Gton

Energy Conservation
Energy management

Fuel Conversion
Energy Transition

1,000500

CO2Emissions
020142021

Implement proprietary
technologies
Heat pump chillers
H2, CCUS, etc.
Implement decarbonizedenergy sources

2030

Energy conservation/
electrification
Smart Infrastructure
Electrify and improve
efficiency of existing businesses

Japan’s
GHG Emissions(2019)

500

CO2Emissions
2040

02019 2021

2030

2040

Expansion ofCCUS business© Mitsubishi Heavy Industries, Ltd. All Rights Reserved.

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Roadmap to MISSION NET ZERO Achievement

Achieve Carbon Neutrality within MHI Group by 2040 anddeploy decarbonization solutions around the world
2021

2023

2040

2050

2021 Medium-Term Business PlanAdvancing the decarbonization of the energy supply side
EnergyTransition
Decarbonization ofExisting Infrastructure

CO2 Solutions
Ecosystem

Hydrogen Solutions
Ecosystem

Advancing the decarbonization, energy efficiency,
manpower saving in the energy demand side
Smart
InfrastructureIntelligent
Logistics Systems
ExistingBusinesses

Decarbonization andEnergy Conservationof Data Centers

MISSION NETZERO

Achieving
MHI Group’s
carbonneutrality

Realizingcarbonneutrality

Infrastructure to Support
Autonomous Mobility

Advancing the decarbonization, electrification, and intelligenceContributing to social implementation toward the realization of carbon neutrality
in each country / region© Mitsubishi Heavy Industries, Ltd. All Rights Reserved.

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MHI Group’s Carbon Neutral Strategy© Mitsubishi Heavy Industries, Ltd. All Rights Reserved.

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MHI Group’s Carbon Neutral Strategy
 In June 2022, MHI Group established the Carbon Neutral Strategy Office todevelop and implement our strategy for achieving carbon neutrality
 Carbon Neutral Strategy Office is taking a two-step approach The first step is preparation of implementation plan until the end of FY2023
 The second step will be to start the implementation in earnest from FY2024

 We have defined 4 main activities required to achieve carbon neutrality andthe first step for each:
Strategy• create a basic strategy and roadmap

System• design and install a new management system

Implementation• demonstrate technologies at MHI’s works
as a trial for customer adoption

Communication• communicate and cooperate with stakeholders© Mitsubishi Heavy Industries, Ltd. All Rights Reserved.

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Carbon Neutral Strategy OfficeCEO● Carbon Neutral Strategy Office was created in June 2022
● It is responsible for “MISSION NET ZERO”

CSO※1CTO※2

3 Business Domains

Business Strategy Office, Growth Strategy Office

Technology Strategy Office, Research & Innovation Center
Digital Innovation Headquarters, Value Chain Headquarters
Newly Organized Carbon Neutral Strategy Office
Energy Systems

Nuclear Energy
Systems

Logistics, Thermal & Drive Systems

Machinery Systems

Plants & Infrastructure Systems

Integrated Defense &Space Systems

4 Business Segments※1 Chief Strategy Officer※2 Chief Technology Officer© Mitsubishi Heavy Industries, Ltd. All Rights Reserved.

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Commercial AviationSystems13

Carbon Neutral Strategy Timeline
All preparation for CN Management should be completed by the end of FY2023
as the first step
FY2021
Set a basic
policy for CN

FY2022

FY2023

FY2024～▼ October 2021
MISSION NET ZERO
Preparation for CN Management

Carbon NeutralManagement

CN should not be the ends but a means to achieve MHI Group’s strategic goals© Mitsubishi Heavy Industries, Ltd. All Rights Reserved.

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Carbon Neutral Strategy
Our strategy comprises 4 main activities which are required to achieve Carbon
Neutrality. ③ Implementation and ④Communication are especially important toensure our plan is practical and sustainable.

ExternalClients
Stockholders

CN Strategy OfficeInternal① Strategy

Business & Growth
Strategy② Management System

Management SystemGovernment
Partners
Municipalities

Collecting Dataand Information③ Implementation

Factory Management
R&D④ Communication

Corporate
Communication

Communication & Cooperation© Mitsubishi Heavy Industries, Ltd. All Rights Reserved.

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Example of Implementation & Practice
Set a Grand Design to CN

Implementation & Practice
Innovation:YOKOHAMA HARDTECH HUB｢Energy Management System Development｣
Integration:MIHARA Machinery Works｢MIHARA CN Project｣｢Roadmap to CN in Factories] (3 Plants)｢Study for Heating Process Solutions｣ (3 Plants)
2021 Medium Term Business Plan
2021事業計画
2014

2021

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Next Business Plans
CN Factory Management
2030

2040
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MIHARA Works
Carbon Neutral Project© Mitsubishi Heavy Industries, Ltd. All Rights Reserved.

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MIHARA Works Carbon Neutral Project The Carbon Neutral Strategy Office is tasked with considering how to achievecarbon neutrality in each plant and setting a general strategy andmanagement system
 One example is the “MIHARA Works Carbon Neutral Project” which is the firstproject that promises to achieve carbon neutrality at a manufacturing plant At MHI’s Mihara Machinery Works, we will aim to reduce completely CO2emissions through the following activities…
(1) installing 12MW solar power(2) pursuing energy saving initiatives(3) implementing electrification solutions© Mitsubishi Heavy Industries, Ltd. All Rights Reserved.

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Mihara Machinery Works(Itosaki Kohama plant, Wadaoki plant) Products：Transportation Systems,
Braking Systems, Printing Machineryetc.
 CO2-emission：10,000 ton-CO2/year(2% of the MHI’s total Scope1 &2 CO2 emission)

Mihara Works Carbon Neutral Project’s goals identify and evaluate specific measures and costs to reduce CO2 emissions
 reflect the measures and the costs to our overall Carbon Neutral strategy
 reach carbon neutrality without using carbon credits like REC to reduce CO2 emissions© Mitsubishi Heavy Industries, Ltd. All Rights Reserved.

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Overview of MIHARA CN Project
Achieve a fully Carbon Neutral
factory by the end of FY2023
Demonstrate the achievability of MISSIONNET ZERO by offsetting 10,000 tons-CO2/year

Mihara Machinery Works
Itosaki Kohama Plant

Wadaoki Plant

Install solar panels
Install an amount of solar panels
equivalent to the electricity consumptionof Mihara Machinery Works.
Achieve Scope 2 decarbonization with thisdedicated renewable energy source.

Utilize as R&D proving ground
Execute challenging adoption of energy
conservation, electrification, fuelconversion, and renewable energy
sources while using as a proving groundfor various technologies and carbon
neutral solutions

×+ H2

H2Energy Conservation/Electrification

CO2＝10,000 tons ≒Substation

KohamaItosakix 700,000 trees

Wadaoki＋Substation

CarbonNeutrality

2021 Medium-Term Business Plan
2021
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202320Overview of Energy Management System
Begin use in FY2022
Validation to begin in FY2022 as a core part of theMHI Group Integrated Development Plan

DemandOptimization
Algorithm

Supply Optimization
Algorithm

 Leverage position as equipment
manufacturer
Utilize knowledge base regarding core energy
supply products such as power plants and HVAC
to develop algorithms which account forlifecycle costs and operabilityData Center Compatible with carbon neutral
equipment
Install solar panels and battery energy storage
equipment. Develop carbon neutrality
management technologies.

 Verify effectiveness withsimulations
Simulate operational changes and/or installationof new equipment. Quantify cost anddecarbonization effectiveness, and increase
accuracy of return on investment calculations

 Use latest evaluation indices
Energy cost and battery charge/discharge costmodels using the latest techniques, including
levelized lifecycle costing, are included in control
algorithms© Mitsubishi Heavy Industries, Ltd. All Rights Reserved.

No .MTI20220039

YHH DemandSide Equipment

300kW

100kW-500kWhMotor

100kW

YHH CN Type EMS Core System Development
Development

Validation

Install CN models in factories

Commercialization

EMS base system for customer useDevelopment

2021

2022

Commercialization

2023
2021 Medium-Term Business Plan

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Links & Contact details【Links】
Web sitehttps://www.mhi.com/jp
MHI Group’s Declaration to Achieve Carbon Neutraril by 2040
https://www.mhi.com/jp/expertise/carbon-neutral
MHI Group’s Carbon Neutrality Briefing
https://www.mhi.com/jp/finance/library/theme【Contact details】
General Manager, Carbon Neutral Strategy OfficeMitsubishi Heavy Industries, ltd.
MASAYUKI MORIHARA© Mitsubishi Heavy Industries, Ltd. All Rights Reserved.

No .MTI20220039

masayuki.morihara.am@mhi.com
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