ANNEX - SECOND PARTY OPINION
NYK LINE
NYK TRANSITION BOND (#3)

Prepared by: DNV Business Assurance Japan K.K.
Location: Kobe, Japan
Date: 29 March 2024
Ref. Nr.: PRJN‐716481-2024-ANX-TB3-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 Transition
Bond (#3) 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 Transition Bond (#3) 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 withspecific use of proceeds (response to the four principles). The conformity of the otherprinciples to the criteria has already been assessed its eligibility in accordance with the
Framework.

Table-1 NYK Transition Bond (#3) ANNEX - Second Party Opinion
Target finance

NYK Transition Bond (#3)

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 Climate Transition FinanceTarget criteria-

Climate Transition Finance Handbook (ICMA, 2023)-

Basic Guidelines on Climate Transition Finance (FSA, METI, and MoE, 2021).

Criteria for the use of proceeds bond-Green Bond Principles (ICMA, 2021)-

Green Bond Guidelines (MoE, 2022)
Disclosure element-1 (Transition
strategy and governance)

Climate Transition

Disclosure element-2 (Environmental

Finance (response tomateriality)

the four disclosure

Disclosure element-3 (Science-based

elements)

strategy)
Disclosure element-4(Implementation transparency)

Bonds with specificPrinciple-1

use of proceeds(Use of proceeds)--

Confirmed reliance on Framework-

Confirmed reliance on Framework-

Confirmed reliance on Framework-

Confirmed reliance on Framework

Confirmed reliance on Framework. Additional
assessment was implemented as follows:-

LNG-fuelled vessels

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(response to the fourPrinciple-2

elements)(Process for project
evaluation and-Confirmed reliance on Framework-

Confirmed reliance on Framework-

Confirmed reliance on Framework. Additional

selection)
Principle-3(Management ofproceeds)

assessment was implemented as follows.
Principle-4-

Status of fund allocation: allocated, unallocated andrefinanced amounts(Reporting)-

Environmental benefits: CO2 emission reduction
rate, SOx emission reduction rate, NOx emission
reduction rate

As an external reviewer, DNV assessed the NYK Transition Bond (#3) 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

9

V. Findings and DNV's Opinion

10

VI. Assessment Conclusion

15

Schedule-1 NYK Transition Bond (#3) Eligible Projects

16

Revision history
Date of issue
29 March 2024

Remarks
Prepared and issued as NYK Transition Bond (#3) 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
Transition Bond (#3) to evaluate whether NYK meets the criteria for bonds with specified
use of proceeds as defined in the CTFH/CTFBG and GBP/GBGLs and to provide ANNEX Second Party Opinion regarding the eligibility of the Transition 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
Transition 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*1

The scope of the review is to be applied as a part of the evaluation of the transition bond with use ofproceeds.

*2

DNV has already reviewed the four disclosure elements of CTFH/CTFBG, "Process for Project Evaluationand Selection" of GBP/GBGLs, and "Management of Proceeds" 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):

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(3) Standards/guidelines to be applied
No.

Standards/guidelines

Scheme owner

1.

Climate Transition Finance Handbook (CTFH)*1

International Capital Market Association(ICMA), 2023

2.

Basic Guidelines on Climate Transition Finance (CTFBG) *1

Financial Services Agency, Ministry of
Economy, Trade and Industry, Ministryof the Environment, 2021

3.

Green Bond Principles (GBP) *2

International Capital Market Association(ICMA), 2021

4.

Green Bond Guidelines (GBGLs) *2

Ministry of the Environment, 2022

*1

The concept of climate transition focuses principally on the credibility of an issuer’s climate changerelated commitments and practices (quoted from CTFH and CTFBG).

*2

It confirms compliance with the four core elements (use of proceeds, process for project evaluation andselection, management of proceeds, and reporting) that must be met when implemented as abond/loan that meets the four elements (Issuer’s climate transition strategy and governance, Businessmodel environmental materiality, Climate transition strategy to be science-based including targets andpathways, Implementation transparency) of transition and has a specific use of proceeds (quoted fromCTFBG).

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 Transition Bond (#3) 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 Climate Transition Bond with a use of proceeds bond as
the basis for the opinion are as follows:“provide an investment opportunity with transparent sustainability credentials”“enable capital-raising and investment for new and existing projects with environmental
benefits"

As per our Protocol, the criteria against which the NYK Transition Bond (#3) has beengrouped into (1) four common elements of CTFH and CTFBG (disclosure elements) and (2)four common elements of GBP and GBGLs, as shown on the following page.
The additional assessment for this ANNEX - Second Party Opinion covers Principle 1 and 4 of
(2).
Part of (1) and (2) has already been assessed for eligibility. Detailed results of the eligibility
assessment for such parts of (1) and (2) 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).

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(1) Four common elements of CTFH/ CTFBG (disclosure elements)
Principle One: Issuer’s climate transition strategy and governance
The financing purpose should be for enabling an issuer’s climate change strategy.

Principle Two: Business model environmental materiality
The planned climate transition trajectory should be relevant to the environmentally-material parts of
the issuer’s business model.

Principle Three: Transition is science-based including targets and pathway
Issuer’s climate strategy should reference science-based targets and transition pathways.

Principle Four: Implementation transparency
Market communication in connection with the offer of a financing instrument which has the aim offunding the issuer’s climate transition strategy should also provide transparency of the underlying
investment program.

(2) 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 transition bondwith specific use of proceeds 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 atransition bond should outline the process it follows when determining eligibility of an investmentusing the proceeds from transition 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 transition bond shouldbe tracked within the issuing organization, that separate portfolios should be created whennecessary 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 the NYK
Transition Bond and supplemented 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.

GBP・GBGLs-1.

Use of Proceeds

NYK has defined the criteria applied to eligible projects as transition projects which meet
NYK Transition Strategy and related handbook, principle, and guidelines (CTFH and CTFBG).
The proceeds of the NYK Transition Bond (#3) will be used for the following three projects(01, 02 and 03). Please see Schedule-1 for details.
All three projects are eligible projects that are aligned with the NYK Green/Transition Finance
Framework and the NYK Group ESG Story 2023, as well as environmental targets set by IMO
and the Ministry of Land, Infrastructure, Transport and Tourism.
The maximum amount of proceeds of the NYK Transition Bond (#3) is expected to total JPY
20 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
an annual basis in accordance with GBP/GBGLs-4.Reporting.

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Project-01, 02, 03: Partial funding for the construction of three LNG-fuelled car
carriers-

The LNG-fuelled carrier is an essential transition project for the implementation of theTransition Strategy set out in the NYK Group ESG Story 2023.

-

Preparation for construction of the first vessel, Car Carrier Vessel Project 1, hasstarted in September 2022 and the construction is expected to be completed in theQ2 2026. Preparation for construction of the second and third vessels, Car Carrier
Vessel Project 2 and 3, has started in June 2023 and the construction is expected tobe completed in the Q4 2025 and the Q2 2026, respectively.

-

According to the fuel conversion path developed by NYK, the first step is to reduce
CO2 emissions by promoting the introduction of LNG-fuelled vessels as described
below, with the aim of achieving zero emissions in the future by introducing andincreasing zero-emission fuel vessels. Measures to avoid lock-in can include
improvement of operational efficiency and energy-saving technologies, early
introduction and expansion of the number of next-generation fuel vessels, increased
use of bio and synthetic fuels, and utilization of carbon offsets.

-

As possible environmental benefits, CO2, SOx, and NOx reduction rates, compared tothose by heavy oil-fuelled vessels of similar size, have been calculated. See Table-2
for details.

Figure-1 LNG-fuelled car carrier vessel (image)

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Table-2 Summary of Project-01, 02, 03 LNG-fuelled car carrier vessels
Project Name:
Estimated allocation:

Car Carrier Vessel
Project 1

Car Carrier Vessel
Project 2

Car Carrier Vessel
Project 3

Approx. JPY 20 billion for construction of three carriers

Total length:

Approx. 199.95 m

Approx. 199.95 m

Approx. 199.95 m

Mould width:

38.00 m38.00 m38.00 mApprox. 7,000 units

Approx. 7,000 units

Approx. 7,000 units

Approx. 73,500 tonnes

Approx. 74,600 tonnes

Approx. 74,600 tonnes

Scheduled completion:

Around the Q2 2026

Around the Q4 2025

Around the Q2 2026

Estimatedenvironmental benefits:

CO2 Reduction rate:
26.1%
SOx reduction rate:
97.6%
NOx reduction rate:
no change

CO2 Reduction rate:
27.9%
SOx reduction rate:
99.1%
NOx reduction rate:
76.3%

CO2 Reduction rate:
27.9%
SOx reduction rate:
99.1%
NOx reduction rate:
76.3%

Maximum number ofloadable cars:
Gross tonnage:(Compared to those byheavy oil-fuelled vesselsof similar size)

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GBP・GBGLs-4.

Reporting

DNV confirms that NYK will report (annual reporting) on the Transition Bond (#3) 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
changes in Transition Strategy or pathways, or 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):☐

TB 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

SOx, NOx emission reductions

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 Transition Bond (#3) meets the criteria established in the Protocol, andthat is aligned with the following stated definition or purpose of the bonds that specify theuse of proceeds within the CTFH/CTFBG and GBP/GBGLs:“provide an investment opportunity with transparent sustainability credentials”“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 Transition Bond (#3) Eligible Projects
Expected Environmental
Benefits

Project Overview
Category*1

Project*1

Project
Name

Target for
Allocation

Expenditure on
LNG-fuelled

Car Carrier
Vessel Project 1

Total length/ Mould
width

Maximum
number of

Scheduledloadable cars /Completion

Gross tonnage

Partial funding

Approx.

Approx. 7,000

for the199.95 m /units / Approx.

construction

38.00 m73,500 tonnes

Partial funding

Approx.

Approx. 7,000

for the199.95 m /units / Approx.

construction

38.00 m74,600 tonnes

Partial funding

Approx.

Approx. 7,000

for the199.95 m /units / Approx.

construction

38.00 m74,600 tonnes

Scheduledfor Q2 2026

CO2

SOx

NOx

reductireductireduction rateon rateon rate

26.1%

97.6%

27.9%

99.1%

76.3%

27.9%

99.1%

76.3%

No
changevessels (incl.
capitalinvestment,
LNG-fuelled
vesselresearch anddevelopment,
business

Car Carrier
Vessel Project 2

Scheduledfor Q4 2025

development
andoperations,working
capital)

Car Carrier
Vessel Project 3*1: Excerpted from the NYK Green/Transition Finance Framework
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Scheduledfor Q2 2026