Carbon Neutral Strategy Briefing
December 4, 2023

Securities Code
4182

©MITSUBISHI GAS CHEMICAL COMPANY, INC.

1

Index1

Carbon Neutral Strategy (Overview)

2

Promotion of Circular Carbon Methanol Concept3

Promotion of CCS Utilization

４©MITSUBISHI GAS CHEMICAL COMPANY, INC.

2

1. Carbon Neutral Strategy (Overview)©MITSUBISHI GAS CHEMICAL COMPANY, INC.

3

Toward a Sustainable Society -Medium-Term Management Plan– We are committed to realizing a sustainable society by balancing social and economic value based on our Mission ofcreating value to share with society.
– Initiatives aimed at carbon neutrality are one of our top strategic priorities.

Social issues
Objective

Changes ininternational situation

1

Shift to a profit structure resilient toenvironmental changes

Strengthening
differentiating
businesses

Creating andnurturing new
businesses

Rebuilding
unprofitablebusinesses-Business Portfolio Reforms-

Demographic changes
Mission

Advancements in
ICT/Mobility
Climate change
Biodiversity crisis

Solvingsocial issues

Creating values to share with society

VisionAn excellent company with uniqueness and presence
built on chemistry

Value

Principles of Conduct

AchievingsustainablegrowthEnvironmental impact
reduction
Diversity
Behavioral changes
under COVID-19

Objective

2

Balance social and economic value-Toward Sustainable Growth-Solvesocial issues

Environmental
protection

Strengthen
disciplineandfoundation©MITSUBISHI GAS CHEMICAL COMPANY, INC.

4

Carbon Neutral Promotion System
ー Climate change risk and other sustainability key issues deliberated and decided by the Sustainability Promotion Council,
comprised of members of the Board and chaired by the President

ー Establishment of Carbon Neutral Technology Liaison Committee, enabling centralized management of MGC Grouptechnology information and promotion of initiatives
Carbon Neutral Promotion System

Climate Change Governance System

Management Level
Sustainability Promotion Council
Presentation/Deliberation
Sustainability Promotion Committee
Presentation/Deliberation
Carbon Neutrality Promotion Technical Committee

Carbon Neutral Technology Liaison Committee
Basic Chemicals
Business Sector

Carbon Neutral
Promotion Team

Energy Resources &Environmental Business DivisionCorporate Planning
Division

Specialty Chemicals
Business Sector

Carbon Neutrality Promotion
Technical Committee
Production
Technology Division
Sustainability Promotion
Department

Environment
Safety & Quality
Assurance
Division

Research & Development
Division©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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MGC’s Roadmap toward Its Ultimate Goal of Carbon Neutrality
ー Aim to achieve reduction of 36% by 2030 in comparison with 2013 and carbon neutrality by 2050
Scope2013 - 20191

• Improve energy efficiency• Reconfigure business portfolio

Main initiatives

258kt in total(CO2 Reduction)

2―2020 - 2023
• Improve energy efficiency• Stop using heavy oil

2024 - 2030

16kt

• Improve energy efficiency

2030 - 2050
• Improve energy efficiency

28kt

40kt

13kt

• Reconfigure business portfolio• Deploy new energy systems/CCUS, switch feedstocks (R&D/collaboration)• Source 10% of energy from renewables• Use transitional energy

14kt

610kt in total• Source 50% of energy from renewables

10kt• Source 100% of energy from renewables

55kt

69kt

Businesses &technologies
Fukushima Natural Gas Power Plant
Provided by Fukushima Gas Power Co., Ltd.

CO2 emissions(kt of CO2/year)

1,107
2013
baseline

Collaboration

Wasabizawa Geothermal Power Station
Provided by Yuzawa Geothermal Power Corp

Pilot plant for consideration of
circular carbon methanol

23% reduction

28% reduction

36% reduction

258

308

394

849

799

714

2019
actual2023

2030

Feedstock switching

2050
Achieve carbon neutrality

45% reduction502

55% reduction

610
2050

Date of public announcement: March 29, 2021
©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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MGC’s Strengths in Carbon-Neutral Technologies(Accumulation of Energy Resources and Environmental Technologies)
ー Over a period of around 60 years, MGC (on a stand-alone basis) deployed a business to develop natural gas. It has exploration anddevelopment technologies that are unique among those found at chemical manufacturers.
ー Furthermore, MGC has implemented crude oil and natural gas exploration technologies on a joint basis with other resource development
companies.
ー MGC has also deployed businesses in the compatible areas of geothermal development and LNG-fired power generation.
ー Over many years, MGC developed catalysts used in methanol synthesis.

Exploratory well “Kajikawa R-1 Well”

1952
Methanol synthesis
1953
Development of waterdissolved natural gas

Fukushima Natural Gal Power Plant
Provided by Fukushima Gas Power Co., Ltd.

1981
Development ofgeothermal power

Tomakomai CCS Demonstration
Project Center

2016*1
LNG power generation

2016
CCS *22021
Production of water*3
dissolved natural gas

Accumulated intellectual property
and know-how adapted andapplied to capturing, storing andrecycling CO2, as well as tobuilding of hydrogen supply
chains1957
Ammonia synthesis*1 Investment in Fukushima Gas Power Co., Ltd.
*2 Commenced press fitting of CO2 within Carbon dioxide Capture & Storage (CCS) demonstration project conducted in Tomakomai City
*3 New production of water-dissolved gas for first time in 50 years by TOHO EARTHTECH, INC., an MGC subsidiary©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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Carbon Neutrality as Business Opportunity for MGC (1)ー The chemical industry today has a linear industry structure, with most raw materials derived from fossil sources
ー Our goal is to help make a positive impact on the global environment by eschewing reliance on fossil resources and adopting
a business model that is more recycling oriented and emits fewer greenhouse gases

Linear and fossil-based chemical industry as of 2020
Air
EconomyIncineration
without CCS
18%
Accumulate in
the economy
29%

Biomass
1%

Open
burning16%

Mechanical Recycling 5%
Feedstock95%

Production
95%

Fossil94%

Manufacturing100%

Use phase100%

End of use
100%

Linkage
11%519 MT

Landfill
21%

GroundSource： Planet Positive Chemicals (The University of Tokyo, Center for Global Commons & SYSTEMIQ)©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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Carbon Neutrality as Business Opportunity for MGC (2)ー Leverage reuse and recycling to recycle resources (carbon); furthermore, use biomass and CO2 as raw materials to reducethe volume of fossil resources usedー If waste CO2 can be fixed underground, this can also become a source for CO2 capture (CCS)ー The chemical industry can be one that captures and utilizes CO2 from other industries (CCU)

The Ideal Chemical Industry in 2050
Point source CO2 from other sectors 12%
Waste polymers to gasification, pyrolysis 2%
Direct air capture
(DAC)
12%
Biomass
29%

Air

Economy

Depolymerization 6.3 %Accumulates inthe economy
24%

Mechanical recycling 21%

Openburning
8%

Reuse 12%CCU

Production
67%

Manufacturing

Use phase
100%

88%

587 MT

Incineration without
CCS 1%
Linkage
8%

End of use
88%

Substitution 9%

Elimination 17%

Fossil12%

CCS
Landfill
16%

GroundSource： Planet Positive Chemicals (The University of Tokyo, Center for Global Commons & SYSTEMIQ)©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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Carbon Neutrality as Business Opportunity for MGC (3)ー Pursue development of products and technologies conducive to carbon neutrality by leveraging distinctive technologies found only at MGC

Development of Products and Technologies Conducive to Carbon Neutrality

Hydrogen manufacturing technologies
using methanol as raw materials(catalysts)

Methanol manufacturing technologies
using CO2 as raw materials

Polycarbonates
using CO2

Procurement ofclean ammonia(fuels, green hydrogenraw materials)

Geothermal power
generation

Solid-state batteries(for EVs)
Fuel cells(for FCVs)
LNG power
generation+ CCUS*

Energy control
systems:
Semiconductormaterials

Direct air capture (DAC): Specialty amines

Biodegradable
polymers

Methanol: Hydrogen carrier

Chemical recycling

Operational streamlining: Optical polymers for sensing
cameras for automotive use*Carbon dioxide Capture, Utilization & Storage©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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カーボンニュートラル戦略（全体像）

Carbon Neutrality as Business Opportunity for MGC (4)2030

Circular Carbon Methanol

Clean ammonia

CO2 to PC

DAC

Judgment on demonstration(up to 2025)

Larger scales and full introduction
to primary materials industry

Commercialization (up to 2030)

Commencement of procurement

Consider factors such as where to conduct procurement and conditions thereof

Bench plantverification (Up to 2024)

Pilot plant verification (up to 2028)

2050

Commercialization

Basic research to scale-up

Implementation
実証判断 （～’30）

CCS in the Higashi-Niigata
Oil and Gas Field

CCS in water-dissolved
natural gas fields

FS of viability as
business (Up to 2023)

Judgment on commercialization (Up to 2030)

Implementation

Judgment on commercialization (Up to 2030)

Implementation©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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Reference (1) Title, Objectives and Measures of Next Medium-Term Management Plan
(Reposted from financial results presentation materials released on November 8, 2023)

Title: Grow UP 2026 – “Growing,” “Winning” and “Sustainable”
Plan Duration: Three years from FY2024 to FY2026 (Fixed Targets)
Positioning: Successor to Grow UP 2023; period that contributes to the realization of the vision for MGC in 2030
Retackling current plan targets and aiming for even higher goals©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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Reference (2) What is “Uniqueness & Presence”?
(Reposted from financial results presentation materials released on November 8, 2023)

ー “Uniqueness & Presence” is another way to define differentiating businesses, those capable of sustainable growth while balancing
both social and economic value, and are outstanding when it comes to “Growing,” “Winning” and being “Sustainable”

Uniqueness & Presence (sustainable growth balancing social and economic value) = Differentiating businesses

Growing

Winning

Sustainable

Businesses possessing competitive
advantages in areas such as quality,
1. Future potential in involved markets, withfunction, supply chain, technology andgreat prospects for growth going forward

cost that are difficult for others to copy

2. Expectation of new market development
via creation of new applications, products→ As a result, theySocially recognized value in terms of“Low GHG emissions” and “Contribution
to measures to counter climate change
and reduce environmental impact”

1. Have presence backed by high market shareand through M&A activity
2. Have market-recognized value, and arecapable of gaining high profitability

Differentiating
businesses

Electronic materials, electronic chemicals (inorganic chemicals),
optical materials,
methanol, energy resources and environmental businesses,
POM, MXDA/aromatic aldehydes, polymer materials©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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2. Promotion of Circular Carbon
Methanol Concept©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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Overview of Circular Carbon Methanol Concept “CarbopathTM”
ー We are promoting Circular Carbon Methanol concept, an initiative to convert CO2 emitted into atmosphere, waste plastics,
non-fossil biomass, etc., into methanol and recycle it for use as chemicals, fuel, and power generation.

We have named Circular Carbon
Methanol concept “CarbopathTM”
The name is derived from “carbon" and“path-finder," and is intended to be apioneer who actively promotes thisconcept, as well as to realize carbon
neutrality and a circular carbon society.
We will guarantee the source and qualityof Circular Carbon Methanol and develop
the term to indicate the product name,related services, and the concept itself.

©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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Selection as a NEDO GI Fund Project
ー MGC and Mitsubishi Chemical selected for Green Innovation Fund ／Development of Technology for Producing Raw Materials for
Plastics Using CO2 and Other Sources／[Research and Development 4] “Development of technology for producing chemicals fromalcohols” (period of FY2021 to FY2028)

Development and demonstration of technology for producing
basic chemicals from CO2

Ethylene

Artificial Photosynthetic Chemical
Process (ARPChem)
Photocatalyst
Water decomposition

H2

Propylene

Membranereaction/separation
Methanol synthesis

Methanol

MTO catalyst

OlefinMitsubishi Chemical

MGC
Mitsubishi Chemical

CO2

Chemical productraw materials

Joint implementation:
The University of Tokyo,
Tokyo Institute of Technology

Plastic

MTO: Methanol to Olefin

Aiming for high-efficiency production of methanol using CO2 andgreen hydrogen as raw materials©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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Status of Proof of Concept Testing at Niigata Plant
ー We have completed proof of concept testing for manufacturing of methanol using CO2 and hydrogen as raw materials as planned in June 2022.
ー Demonstration trials for methanol production using gas from the gasification of biomass and waste plastics were completed as scheduled in June 2023.
ー Demonstration trials also are progressing for Circular Carbon Methanol from biogas.
ー We continue to develop manufacturing technologies for Circular Carbon Methanol (CarbopathTM) from various raw materials, and to promote proof ofconcept testing.

▼
Proof of concept test items

2021

Manufacturing Technology for
Circular Carbon Methanol using
CO2 and hydrogen as raw material

Technology
verification
Proof of concept
testing

Manufacturing Technology for
Circular Carbon Methanol frombiomass and waste plastics

Manufacturing Technology for
Circular Carbon Methanol frombiogas (fermented/anaerobic
digestive gas)

2022

2023

2024

2025

Completion of technology
establishment and concept design

2026

2028

2029

2030

Commercialization

Completion of pre-basic design

Technology
verification
Proof of concept
testing

Commercialization
In progress (up to June 2023)
Technology
verification
Proof of concept
testing

Completion ofplan formulation

Equipment
modification

Judgment on demonstration (up to 2025)

Test operation(March 2024 onward)
Promotion/marketing

Development of methanol synthesis
reactor for membrane reaction
separation process (GI Fund)2027

Lab scale evaluation
Process simulation

Bench scale evaluation

Commercialization

Proof ofconcept
testing©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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Image for Commercialization and Increasing Scale
ー We will aim for the commercialization of Circular Carbon Methanol in the amounts of 100,000 tons by FY2030, and a maximum of
1,000,000 tons from FY2030 onward.

Phase 3Phase 2Phase 1
By-product hydrogen, etc. + Utilization ofrecovered CO2
Demonstration of Circular Carbon Methanol

Commercialization of Circular Carbon
Methanol, using renewable hydrogen
ー Overseas: Expansion of market for materials
and fuels
ー Japan: Start valuation of CO2 methanol

ー Overseas: Dawn of market for materials andfuels
ー Japan: Encourage adoption among sourcesof demand→ Establishment as a manufacturing andsales business⚫ Utilization of international projects, domestic renewableenergy-based projects, and existing business

Larger scales for Circular Carbon Methanol
Full introduction to primary materials industry

ー Expanding value of Circular Carbon Methanolー Decarbonization in domestic petrochemicalindustrial complexes→ Improvement and extension of business⚫ Development of large-scale renewable energy overseas⚫ Advance of conversion to materials by MTO

Up to 1,000,000 tons

⚫ New project creation**Waste plastic-based projects also considered in parallel

Up to 100,000 tons

Up to Tens of
thousands of tons
FY2021 onward

FY2025 onward

FY2030 onward©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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Promotion of Circular Carbon Methanol Concept -Example 1Launch of Japan’s first pilot project for waste plastic gasification and methanol conversionーLaunch of pilot technology for production of methanol from hard-to-recycle plastics with low purity/cleanlinessーSelected for Demonstration Project for a Plastic Resource Circulation System toward a Decarbonized Society supported by a grant coveringbusiness expenses for countermeasures to reduce CO2 sponsored by Japan’s Ministry of the EnvironmentーConstruction and operational start by Kobelco Eco-Solutions of pilot system in Osaka Eco Town
Technology

Provision of demonstration site:

DINS Kansai

Recycling

Circular Carbon Methanol(methanolization)

Technology:

Kobelco Eco-Solutions

MGC
sales and
distribution network

Gasified gas(transported domesticallyand internationally)

Mitsubishi Kakoki

CO + H2

Gasification

Chemical Recycling
with Circular
Carbon Methanol

Plasticization

Daiei Kankyo
Waste Plastic
Collection

Disposal

Plastic
Products©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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Promotion of Circular Carbon Methanol Concept -Example 2Study of bio-methanol production using biogas from a sewage septic center as raw material

Niigogawa Septic Center

MGC Niigata Plant

Water treatment facility

Digestion vat

Biogas holder(aeration, precipitation)(methane fermentation equipment)(gas adsorption, refining)

Biogas holder
Truck(receiving tank)

Blendingwithnaturalgas

Methanol pilot facility

CarbopathTM bio(bio-methanol)

MGC Niigata Plant

3km

Transport: ISO container
Niigogawa Septic Center©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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Promotion of Circular Carbon Methanol Concept -Example 3Start of study on production and sales of the world’s first Circular Carbon Methanol made from CO2
generated from glass production
AGC

CO2-derived methanol

CO2 generated at glass production facilities

MGC

AGC

Sales

Scope of this study

Sale of chemicals basedon carbon recycling

AGC

CO2 generated at chemical production
facilities, etc.

AGC

MGC

Use in chemical raw materials

This study (production and sale of CO2-derived methanol)
Future studies (use of CO2-derived methanol as AGC’s chemical raw materials, and sale of chemicals based on carbon recycling)

MGC distribution andsales networks
In the future, study conversion into raw materials for chemicals

CO2
Methanol synthesis

Methanol refining

Circular Carbon Methanol

H2©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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Promotion of Circular Carbon Methanol Concept -Example 4Studying commercialization in Gladstone (Queensland, Australia)ー

MGC signed a memorandum to study commercialization of the production and sale of methanol derived from green hydrogen and CO2collected from the Gladstone Plant of Cement Australia Pty Ltd. (Head Office: Queensland, Australia), from application of MGC’s own
Circular Carbon Methanol production technology.

ーSimple feasibility study is currently in progress.

(https://www.mgc.co.jp/eng/corporate/news/2022/221028e.html)

Gladstone

The Gladstone area has a wealth ofrenewable energy sources, with a hostof green hydrogen projects being
considered. In addition, thanks to port
facilities, highly skilled humanresources and other infrastructure inplace, the location is considered ideal
for a Circular Carbon Methanol
business.
The green hydrogen economy is given
top priority in the Queensland
government’s hydrogen industry
strategy; the MGC plan is occurring instep with the government’s strategy.

Map data ©2022 Google©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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Promotion of Circular Carbon Methanol Concept -Example 5Dual-fuel methanol carrierーCompared to burning conventional bunker fuel, methanol fuel significantly cuts SOx, NOx and PM emissions, enabling an up to 15%
reduction in CO2 emissions.

ー

Orders for methanol-fuel carriers are set to rise, with methanol for use in fuels also expected to grow.
Methanol Fueled Fleet
In Operation

On Order

250

200

150

100

172

176

137
76

50
2

33

15

24

28

28

28

28

28

28

2021

2022

2023

2024

2025

2026

2027

2028

0

Source: DNV©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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Promotion of Circular Carbon Methanol Concept -Example 6MGC reaches basic agreement with Mitsui O.S.K. Lines (MOL) on long-term time charter contract for
dual-fuel methanol carrierー

MGC itself has reached a basic agreement for the long-term charter of a methanol carrier, which can run on either methanol or conventional
heavy fuel oil.

ー

The vessel will be slated for delivery in 2025. It will be the first methanol dual-fuel carrier vessel chartered by a Japanese company under along-term charter. MGC and MOL aim to further develop the marine transportation of methanol through this agreement.

©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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ISCC PLUS Certification Status
Product

Site

StatusMethanolJapan (MTI, Methanol Division)
Singapore (MGC-S)“Trader with Storage” certification received

Japan (NF)

Manufacturing certification planned

Thailand (TPAC), Korea (KEP)

Manufacturing certification received

United States (GPAC-USA, MEP-A)“Trader with Storage” certification received

Korea (KPAC)“Trader” certification received

Thailand (TPCC)

Manufacturing certification received

Japan (KF, KPC, MFS)

Manufacturing certification planned

Japan (MEP, MTI, Engineering Plastics
Division)“Trader with Storage” certification planned

Polyacetal

Polycarbonate©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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3. Promotion of CCS Utilization©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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CCS (Carbon Dioxide Capture & Storage)

Key ground layer characteristics for CCS

CO2 capture facility
Injection facility• Reservoir with many pore spaces• Fine-grained caprock that prevents CO2 leakage• No faults

CO2 capture facility

Subsea pipeline

Factory A

Features of natural gas fieldWellhead assembly• Reservoir with lots of pore spaces where natural gas
was stored• Fine-grained caprock that held natural gas in• No natural gas leaks due to faults

CO2 injection well

Hard ground layer
CO2 cannot
penetrate

Injection facility

Factory B

Subsea wellhead assembly

CO2
CO2 injection well

Caprock(mudstone etc.)

A geological structurewith a suitable reservoir
overlain by a caprock isrequired.

CO2

It is a layer of
mudstone etc. andblocks CO2.

StoredCO2StoredCO2Caprock

Reservoir(sandstone etc.)

Layer suitable forCO2 storage

It is a layer ofsandstone etc.
with many porespaces and stores
CO2 within them.

Reservoir

CO2 storage in pore spaces in rock

Source: Japan CCS Co., Ltd. (with revisions)©MITSUBISHI GAS CHEMICAL COMPANY, INC.

27

MGC Strengths
ー Ownership of natural gas and water-dissolved natural gas fields (Higashi-Niigata Oil and Gas Field andIwafune-Oki Oil and Gas Field)
ー Existing natural gas fields as carbon neutral infrastructure enabling development for CO 2 storage and usage

Iwafune-Oki Oil and Gas Field

Non-associated natural gas

Discovered in 1983

Natural gas pipeline

Higashi-Niigata Oil and Gas Field
Discovered in 1959

Water-dissolved natural gas

Discovered in 1955

MGC Niigata Plant©MITSUBISHI GAS CHEMICAL COMPANY, INC.

28

Promotion of CCS Utilization: METI Long-term CCS Roadmap
ー In Japan, the Ministry of Economy, Trade and Industry (METI)’s Long-term CCS Roadmap Study Committee announced the final
wrap-up in March 2023
IEA estimation of CO2 recovery volume

CO2 capture
volume in 2050

CCS scale forJapan in 2050

2050 net zero scenario

7.6 billion t/yr.

0.24 billion t/yr.

Sustainable development
scenario

5.4 billion t/yr.

x 95%*1 x 3.3%

*1 The “2050 net zero
scenario” assumes storage
underground of 95% of
captured CO2 in groundlayers.

（IEA, 2021, World Energy Outlook 2021）

CO2 capture volume (billion tons)

8.0

6.0

4.0

Declared commitment
scenario

3.8 billion t/yr.

2.0

Declared policy
scenario

0.2 billion t/yr.

0.17 billion t/yr.

0.12 billion t/yr.

0.06 billion t/yr.

0

2010

2020

2030

2040

2050

Depending on the scenario, Japan is also estimated to requireapprox. 0.12 billion to 0.24 billion t/yr. for CCS.

Source: Developed based on materials from May 2023 final wrap-up of METI Long-term CCS Roadmap Study Committee©MITSUBISHI GAS CHEMICAL COMPANY, INC.

29

Promotion of CCS Utilization: METI Long-term CCS Roadmap
ー Beyond commitment to preparing the business environment for enterprises to launch CCS businesses by 2030, also offered explicit
actions for preparing legal grounds

Long-term CCS Roadmap (Cont’d)
Full-scale deployment

Business model construction(1) Government support

Up to 2050

Up to 2030

Up to 2026

Up to 2023

Support model advanced CCS businesses, aim to secure an estimated annual storage capacity of 6 to 12 million tons by
2030[Target of Support]
Operators of businesses addressing the issues below targeting business launch by 2030
- Promotion of larger-scale businesses through clustering of CO2 capture sources and the conversion of CO2 storage regions into hubs
- Overwhelming cost reductions- Moving to gain public understanding in CO2 storage regions, etc.
[Anticipated Business Schedule]
Study of suitable CCS locations,
feasibility surveys, etc.

Test drilling, storage capacity
evaluation, etc.

Final
investment
decisions

Drilling, capital investment, etc.

Operations*Scheduled selection of multiple projects with differing combinations of CO2 capture sources, transportation methods and CO2 storage regions
Ground structure survey implementation and loan of survey data
Study of CCS business sustainability and enactment of support(2) CCS cost reductions- The CCS cost targets set for 2050 are separation and capture cost under 25%, transportation cost under 70%, and storage cost under 80% of comparable 2023 figures- Promote R&D and demonstration of technologies enabling cost reductions
Until 2030, hold government-led CCUS briefing sessions in each region on this topic(3) Promote increased
public understanding

To gain the understanding of relevant local stakeholders residing near CO2 storage sites, along withclear explanations, study mechanisms for supporting activities for creation of hubs & clusters andrelated industries and employment centered on CCS conducted by regional public and private groups

Enact initiatives based on study results(4) Overseas CCS promotion

In addition to supporting interest acquisition by Japanese firms, embark on international negotiations for possible CO2 exports through “Asia CCUS Network” advanced by
Japan and Asian countries, coupled with support for projects with risk money supplied by JOGMEC(5) Preparation oflegislation

Quickly prepare
grounds for legal
systemization(6) Drafting and review of
CCS Action Plan

Drafting of CCS Action Plan
- Refinement of annual storage
capacity targets- Review of cost targets- Write-up of technology development
guidance- Write-up of location survey planLegal
preparation

Establishment of test drilling rights
Establishment of storage business rights

Implement revisions as needed in light of progress on decarbonization initiatives throughenergy conservation, electrification, and hydrogenation, and progress on cost reductions

Source: Materials from March 2023 final wrap-up of
METI Long-term CCS Roadmap Study Committee©MITSUBISHI GAS CHEMICAL COMPANY, INC.

30

CCS Utilization Promotion: CCUS Hub & Cluster Network Development Concept inNiigata Prefectureー Niigata Prefecture has a declared aim of effectively zero greenhouse gas emissions by 2050
ー The prefecture wrapped up the “Niigata Prefecture Carbon Neutral Industry Vision and Business Model Development Roadmap” in March 2021, and the“Niigata CCUS Hub & Cluster Network Development Concept” in March 2022. The “Carbon Neutral Network Development and Infrastructure Preparation
Strategy” was formulated in March 2023.
Initiatives in Tainai area, Niigata(A) Niigata Area CCUS Hub & Cluster Network Development Concept (multiple enterprises)
Start from this fiscal year of F/S by Tohoku Electric Power, MGC, JAPEX and NRI ahead of CCUS infrastructure preparation
Key Sites and Facilities
Oil and gas fields

Policy for Niigata Port area CCUS hub & cluster network preparation
Outside the area (import/shipping)

Niigata
Port area

Tainai areaGas-fired thermal
power generation
Chemical plants

Carbon-free fuel imports

Carbon-free electricalsupply expansion

Carbon-free chemical
resource supply

Carbon-free fuelsupply expansion

CN fuel import infrastructure (carbon-neutral LNG/hydrogen/ammonia/bio resources)
Zero emissions facilities
for gas-fired thermal
power generation

Papermaking plants
Biomass power
generation

Carbon recycling
methanol production
facilities

Blue hydrogenproduction

Zero emissions facilities
for large-scale factories

BECCS facilities(bio-derived)

Bio-derived fuels
Port and distributionrelated facilities

CO2 and H2 pipeline facilities

CO2 utilization and storage facilities

Conference participating
enterprises/organizations
Agano area

From Google Maps

Source: Materials from March 2023 Niigata Prefecture Carbon
Neutral Network Development and Hydrogen Use Promotion
Council’s “Niigata Carbon Neutral Network Development andInfrastructure Preparation Strategy”©MITSUBISHI GAS CHEMICAL COMPANY, INC.

31

CCS-related Initiatives at MGC (1): Advanced CCS Businessー “Higashi-Niigata Area CCS” selected as one of seven sites nationwide identified through public bidding to assume projects from the “Feasibility Study
Concerning Implementation of Advanced CCS Businesses” conducted by Japan Organization for Metals and Energy Security (JOGMEC) in fiscal 2023
ー Five-company alliance: MGC, Tohoku Electric Power, Hokuetsu Corporation, Japan Petroleum Exploration (JAPEX), Nomura Research Institute (NRI)ー Aim for business launch by 2030, with target CO2 storage of 1.5 million t/yr.

Separation and capture studies

CO2 transport (pipeline) studies
Injection and storage studies

CO2 injection bases (storage)

CO2 pipeline

Separation and capture studies

Study support andadvisory service
CO2 pipeline

Separation and capture studies

CO2 pipeline
Source: JOGMEC website©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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CCS-related Initiatives at MGC (2): Study of CCUS for EGR in Non-Associated Natural
Gas Fields
ー Investigation of repurposing of existing wells as CO2 injection wells to increase recovery of natural gas
ー MGC has been entrusted to conduct the business project openly recruited by JOGMEC and has launched a study exploring the
repurposing of existing non-associated gas wells as CO2 injection wells for EGR (Enhanced Gas Recovery).
ー The push effect from the CO2 should not only increase natural gas production but is expected to function as a carbon offset by fixing
CO2 underground. As such, this initiative will yield much the same effect as CCS, one measure for greenhouse gas reduction aheadof achieving carbon neutrality by 2050.
ー Knowledge gained through this investigation is expected to contribute to promotion of CO 2-EGR/EOR (Enhanced Oil Recovery) in oil
and gas fields in Japan.
How EGR (Enhanced Gas Recovery) Works
CO2 from production
processes

Natural gas well

Natural gas pushed
out by CO2Natural gas

Local hydrogenstationHydrogen produced
from natural gas

Point
CO2 injected underground remains there,
contributing to carbon neutrality

Source: Niigata Nippo (Niigata Daily News),
January 1, 2022

©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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CCS-related Initiatives at MGC (3): Study of CCS in Water-Dissolved Natural Gas Fields
ー Promoting initiatives for bringing CCS to water-dissolved gas fields, and for “blue hydrogen” production
ー Business feasibility study will be conducted until FY2023; decision to achieve proof-of-concept by 2030

After extracting natural gas and iodine from water-dissolved natural gas brine, oncehydrogen is separated from the natural gas, the resulting CO2 will be injectedunderground with the brine, allowing blue hydrogen production to be attempted.

Reinjected
water

I2
Iodineseparation

Oil field
brine

Iodine

CO2
CH4

H2

CO2

Water-dissolved
natural gas

Hydrogengeneration system

Reinjection

Water-dissolved
natural gas brine

Tap water

Hydrogen station©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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Carbon Neutral World of 2050 as Imagined by MGC– As a chemical manufacturer, we are in a perfect position to positively impact the earth’s environment.

Supply/benefit society©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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Disclaimer
This document has been translated from the Japanese original forreference purpose only. In the event of any discrepancy between thistranslated document and the Japanese original, the original shallprevail.
This document contains performance forecasts and other statements
concerning the future. These forward-looking statements are based on
information available at the time. These materials were prepared andon certain premises judged to be reasonable. None of these forwardlooking statements are intended to be guarantees of future
performance. Various factors may cause actual performance to differ
significantly from forecasts.

©MITSUBISHI GAS CHEMICAL COMPANY, INC.

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