The Japan Gas Association
1-15-12 Toranomon Minato-ku, Tokyo105-0001, JAPANApril 25, 2022

Summary of Remarks by JGA Chair HONJO Takehiro

Introduction
Amid ongoing concerns about LNG supply and demand following RussiaUkraine conflict, the government has stated its "policy of not withdrawing" fromcontinued operations at Sakhalin 2, saying that the project is extremely
important from an energy security standpoint.
The gas industry will continue to work for the stable procurement of LNG,
recognizing that it is extremely important for the stable supply of city gas. TheJapan Gas Association will continue to closely monitor the situation in close
cooperation with the gas companies and the Agency for Natural Resources andEnergy (METI).

1. 5-year review of the full liberalization of entry into the gas retailbusiness.
With the full liberalization of entry into the gas retail business in April 2017,residential customers are now able to choose their gas supplier. Five years havepassed since then, and compared to the beginning of the full liberalization ofgas retailing, the number of new entrants has increased from 39 to 77, and theshare of sales volume in the gas market has expanded from 8.2% to 19.6%,indicating a certain degree of new entrants.
Gas companies are also launching new rate and service menus, and we1

perceive that the gas industry as a whole is being revitalized. We would like tocontinue to grow as an industry and improve customer convenience throughcompetition among companies.
On April 1, the pipeline divisions of Tokyo Gas, Osaka Gas, and Toho Gas
were spun off, and while the neutrality of the three companies' pipeline divisions
has been established by firewalls, the clear separation of the organizations willfurther ensure their neutrality. The pipeline companies, as businesses that
"supply gas energy through pipelines," will play a central role in the gas business
and work to expand gas use and efficiency based on ensuring a stable supply
and safety.
On April 20, it was announced that the three pipeline operating companies
had signed a collaboration agreement in the three areas of decarbonization,
smart security, and resilience to ensure stable supply and security and to further
expand the use of city gas.

2. Public and private initiatives for social implementation of methanationAt the Methanation Promotion Public-Private Council meeting on March22, Tokyo Gas and Osaka Gas explained their technology development
timetable and recent studies on demonstration projects in Japan and overseas,and expressed their strong commitment to introduce 1% synthetic methane by2030.
At the April 19 meeting of the Council, the government presented an action
plan for 2030 that outlines the timing, entities, and initiatives for each of"technology development," "business," and "rules. The content of the Action
Plan reflects the discussions that have taken place in the Council thus far, andwe hope that concrete discussions will be carried out in accordance with the2Action Plan in the future.
The gas industry will continue to work diligently toward social
implementation in cooperation with the government and related industries.
On April 19, the results of the adoption of the Green Innovation Fundrelated to methanation were announced. From the gas industry, Tokyo Gas'
"Development of Innovative Methane Production Technology by Low
Temperature Process" and Osaka Gas' "SOEC Methanation Technology
Innovation Project" were selected for the "Fuel Production TechnologyDevelopment Project Using CO2 and Other Resources".
By making effective use of such policy support, we would like to promote
our technology development efforts.

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