MOL Group

Environmental Vision 2.2- Our BLUE ACTION for Net ZeroApril 2023

1

From the blue oceans, we sustain people's lives andensure a prosperous future.
In June 2021, MOL announced the "MOL Group Environmental Vision 2.1," which set
a target of achieving net-zero emissions by 2050.
This time, we have updated the vision from version 2.1 to the "MOL Group
Environmental Vision 2.2." In addition to showing steady progress since theannouncement of version 2.1, we have formulated concrete action policies. We areenhancing the effectiveness of our actions by adding and updating KPIs andmilestones as important indicators for achieving ours. We also drew a clear path for
reducing emissions toward achieving net zero, and quantified and visualized thecontributions that each action should make toward reducing emissions.
The Group has positioned environmental strategy as one of its main strategies in ourgroup management plan "BLUE ACTION 2035." Additionally, "conservation of themarine and global environment" is one of our sustainability issues (materiality).
Initiatives to address environmental issues are at the core of our efforts to improve
corporate value and realize the Group's vision.

Takeshi Hashimoto
President
Representative Director

The MOL Group will work as one to reduce the burden on the global environment,
not only to combat climate change but also to protect natural capital andbiodiversity, while earning the trust of a wide range of stakeholders.

Tatsuro Watanabe
Chief Environment &Sustainability Officer (CESO)
Executive Officer2What We Should Do Now to Curb Global Warming- Background of the Update to the Environmental Vision Setting a target of achieving net-zero by 2050 has become the norm for businesses.
Under such circumstances, we will lead the global movement toward decarbonization by prioritizing measuresthat can reduce emissions immediately without postponing measures that can be achieved prior to 2050.
We will promote emission reductions that can be implemented now, such as immediately starting the use of
LNG, a low-emission alternative marine fuel, and setting a quantitative contribution target for the short tomedium term for carbon dioxide removal (removal of CO2 from the atmosphere).
Contributions with an awareness of carbon budgets
In order to limit the rise in global temperature to a certain
level, there is an upper limit to the cumulative amount of
GHG (the sum of past and future emissions) that can beemitted globally, and not much of the carbon budget is left
to achieve the 1.5 °C target. It has been indicated that if
emissions are not reduced sufficiently, they will possibly
exceed the upper limit before 2050.

Vertical axis: GHG emissions

Gray line: Estimated curve under current CO2 emissions
Green line: 1.5 °C global carbon budget

Referen c e ： “M i nd the Gap”, Energy
Transition Commis sion, 2022

Changes from Environmental Vision 2.1
1. Clarified MOL’s Pathway to Net Zero Emissions (⇒P.13)

2. Established milestones at midway points to 2050 to increase the effectiveness of actions for net zero(⇒P.14)
3

Contents
Section 1 Commitment to the Environment

Sustainability Management of MOL Group
Commitment to the Environment in Our Management Plan
Risks and Opportunities Related to Climate Change
Environmental Management System
Progress on Environmental Vision 2.1

05-10
06
07
08
09
10

Appendix

44-49

Notes on Methodology and Data
45-47
Track Record of Environmental Impact Reduction 48
KPI Results
49

Section 2 Overview of Environmental Vision 2.2: Updates from 2.1 11-14
Overview of Environmental Vision 2.2
Clarifying the “Pathway to Net Zero Emissions”
Establishing KPI & Milestones

Section 3 Five Actions to Realize Net Zero

Action 1: Adopt Clean Energy
Action 2: Further Adopt Energy-saving Technologies
Action 3: Efficient Operations
Action 4: Build Business Models that Enable Net Zero Emissions
Action 5: Expand Low-carbon/decarbonized Businessby Leveraging the Group’s Collective Strengths

Section 4 Natural Capital / Biodiversity
MOL Group Approach
Quantitative Milestones
Specific Efforts to Reduce Impact
Initiatives in Mauritius

12
13
14

15-38
17-21
22-23
24-26
27-31
32-38

39-43
40
41
42
43

You can also refer to the following web pages:
 Integrated Report - MOL Report Management Policy
 Management Plan
 Sustainability Management
 Environment (Conservation for Marine and global
environment) Sustainability Data

4

Section 1

Commitment to theEnvironment

5Section1

Sustainability Management of MOL Group

1. Commitment to the Environment

2

3

4

- Positioning of Environmental Vision 2.2 ◼ The MOL Group has identified five Sustainability Issues, and established the “MOL Sustainability Plan (MSP),” aplan for specific actions we will take on those issues, as a part of our management plan "BLUE ACTION 2035“.
◼ Our Environmental Vision 2.2 sets forth the vision (targets and actions) for "conservation of the marine andglobal environment," one of the sustainability issues.
Overview of Sustainability Management
Safety & Value(Providing added value throughsafe transportation and social
infrastructure businesses)

Environment

Safety Vision (planned)
MOL Group Environmental Vision 2.2(Conservation of the marine andglobal environment)

Human & Community(Contributing to the growthand development of people
and communities)

Innovation(Innovation for development inmarine technology)

Governance(Governance and complianceto support businesses)

Climate change Preservation of Protection of Prevention ofmarinecountermeasures environments biodiversity air pollution

Human Capital Vision
DX Vision
Three Basic Principles ofCorporate Governance6Section

1

Commitment to the Environment In Our Management Plan

1. Commitment to the Environment

2

3

4

- Conducting environmental investment to reduce emissions for the 1.5 °C target -◼ Based on our belief that the execution of the management plan will resolve the sustainability issues, thusincreasing corporate value, we have incorporated initiatives on the sustainability issues into our management
plan “BLUE ACTION 2035.”(Materiality)

Overview ofInvestments in environment：650 billion yen over the three years from FY2023 to FY2025
Estimated investment*(FY2023-FY2025 total)

Reduction of the Group’s GHG Emissions¥350 billion

Expansion of low-carbon anddecarbonization energy projects¥300 billion

Total environmental investment¥650 billion

50%50%or以上more¥1,200

投資額全体12,000億円に占める割合
of the total investment ofbillionActively implement
capital expenditures toreduce emissions in line
C targetwith the 1.5°

*The amounts are estimates and may change in future.

Examples• Alternative fuel vessels (LNG, methanol, biodiesel, ammonia, hydrogen, etc.)• Equipment to use wind power (e.g., Wind Challenger)• Boosting operation efficiency
Examples• Offshore wind power-related business• Clean energy production (ammonia, hydrogen, e/bio-methane/methanol, etc.)• Clean energy transportation (liquefied CO2/ammonia/liquefied hydrogen, etc.)• Carbon dioxide removal projects, etc.

7Section

1

Risks and Opportunities Related to Climate Change

1. Commitment to the Environment

2

3

4

We conduct scenario analyses of an ultra-long term up to 2050, assess the myriad risks and opportunities presented by climate change, and integrate theresults of the analyses in our Environmental Vision updates and management strategies. The results are disclosed externally using the TCFD* framework.
While the world could be heading in the direction of any of the 1.5°C, 2.0°C or 2.6°C scenarios, we have made it our basic policy to implement a transition
plan consistent with the 1.5°C target of the Paris Agreement and have verified that this transition plan ensures resilience in any of those scenarios.

▪ Change in energy mix▪ Progress in electrification▪ Introduction of carbon
taxes and emission
trading▪ Enhanced regulation, e.g.,
EEDI / EEXI
▪ Floods, typhoons, etc.
▪ Introduction of alternative fuelpowered vessels▪ Fluctuations in demand formarine transportation▪ Progress in electrification, etc.

Factors influencing profit/loss from now to 2050 (Example: 1.5°C scenario)
Quantify impact of key financial/ strategic risks & opportunities

Main risks and opportunities
identified through analysis of
3 scenarios: 1.5°C, 2.0°C & 2.6°C

Related information(Link to our website)⚫ Disclosure based on
TCFD recommendations⚫Risk
Management

Vertical axis: Profit/loss
Presumed risks
due to climatechangeExpansion of new
business domains(e.g., offshore wind power)

Increase

Appropriate
response tocarbon pricing

Current
profit (loss)

Decrease

Fluctuationof cargo
movements
andincreases infuel costs /carbon tax

Profit (loss)
for FY2050

Efficient
operations andenergy-saving
equipment, etc.

Introductionof nextgenerationfuel vessels

Ensure resiliencein any scenario

Implementation of a transition plan consistent with the 1.5°C target of the Paris Agreement*The Task Force on Climate-related Financial Disclosures (TCFD) advocates the disclosure of climate change-related risks and opportunities.

8Section

1

Environmental Management System

1. Commitment to the Environment

2

3

4

◼ The MOL Group has established an environmental management system with the President & CEO as the chief executive officer.
◼ The degree of progress in our measures to counter climate change are reflected in part of the evaluation for determining
compensation of the CEO and other executives.
Board of Directors
Supervision andinstruction

ReportEnvironmental Management System◼

Executive Committee
President
Representative Director(Chief Executive Officer)◼

Environmental & Sustainability Committee

The Environmental and Sustainability Committee, a subordinate organ of
the Executive Committee, serves as the main deliberative body on
environmental initiatives, including not only climate change measures but
also natural capital and biodiversity (⇒ from P.40).
The Board of Directors is responsible
Related information (Link to our website)
for oversight of environmental● Riskinitiatives and makes decisions on● Environmental
Management
Management
particularly important matters.

Chairman：Executive Vice President
Vice Chairman：Chief Environment Sustainability Officer
Supervision andinstruction

ReportEnvironment &Sustainability Strategy
Division(Dept. in charge)

Corporate
Planning Division

Collaboration

ReportHeadquarters ofTechnology
Innovations

Collaboration

Supervision andinstruction

Divisions of MOL and group companies

Incorporation of Climate Change Factors into Executive
Compensation◼

The status of our measures to counter climate change and the degree ofprogress on other sustainability-related initiatives are reflected in part of theevaluation for determining the long-term contribution variable
compensation portion (20% of the total) ofRelated information
remuneration for each executive director,● Executive
including the CEO and CESO.
Remuneration（as of April 2023）
9

Section

1

Progress on Environmental Vision 2.1

1. Commitment to the Environment

2

3

4

◼ In line with our Environmental Vision 2.1, we are steadily reducing both GHG emissions and GHG emissions intensity.

GHG Emissions

GHG Emissions Intensity

FY2021 MOL group GHG Emissions
Unit: g-CO2e/ton mile

Unit :
Thousand tons

Scope 3
2,455
Scope 236
Scope 1
10,112■Scope 1-MOL vessels■Scope 1-Group company vessels■Scope 1–Others■Scope 2■Scope 3-Cat.3■Scope 3-Cat.11■Scope 3-Cat.2■Scope 3–Others

Green line: Standard method
Black line: Reference method

Scope 3–Cat. 3
Emissions from the production of fuel consumed

Scope 3–Cat. 11

Emissions from fuels sold by the Group

Scope 3–Cat. 2

Emissions from the building of MOL’s owned vessels

FY2019

Scope 3–Others

FY2021

Total of Cat. 1, 5, 6, and 7

FY2019 (base year)

14,309thousand tons

Down 12％

FY2021FY2019 (base year)

thousand tons

g-CO2e/ton mile

12,603For the methodology for calculating emissions and intensity, please refer to the Appendix (⇒P.45 and P.47).

10.86

FY2021

Down 3.7％(Yearly average:
down 1.9%)

10.46

g-CO2e/ton mile

Independent Assurance Statement

Appendix10Section 2

Overview ofEnvironmental Vision 2.2- Updates from Environmental Vision 2.1 -11

MOL Group Environmental Vision 2.2
For the next generation on board this planet, the MOL Group will work collaboratively with our partners and stakeholders with creativity to resolve environmental issues.
We will continue to provide solutions for issues of high importance such as the preservation of the marine environment, protection of biodiversity and prevention of air
pollution, and in order to tackle climate change with utmost urgency, the MOL Group will make a concerted effort to achieve net zero GHG emissions by 2050. With thesecontributions for the sustainable development of our society and the preservation of nature, from the blue oceans, we sustain people’s lives and ensure a prosperous future.

Medium- to long-term targets
In the 2020s
Deploy net zero emissions
ocean-going vessels

By 2035
Reduce GHG emissions
intensity by 45%
In addition to Scope 1, part of Scope 3 covered(international marine transport operated by MOL)

By 2050
With the concerted effort throughout
the Group, achieve net zero GHG
emissions
All of Scope 1, 2, and 3 covered (MOL + consolidated subsidiaries)

Five actions to achieve medium- to long-term targets
Adopt clean energy

Further adopt
energy-saving
technologies

Efficient
operations

Build businessmodels that enable
net zero emissions

Expand low-carbon /decarbonized business byleveraging the Group’s
collective strengths

KPI & milestones measuring action progress
Environmental Vision 2.2 Overall･ Amount of environmental investment:¥650.0 billion (Cumulative from FY2023)[2025]･ Total amount of GHG emissions :23% reduction (compared to 2019)[2030]

・No. of LNG/methanol-fueled oceangoing vessels : 90
・Ratio of zero-emission fuel used : 5%・Ratio of power fromrenewable energy for Scope 2 : 100%
[2030 for the above]
・No. of net zero emissions ocean-goingvessels : 130 [2035]

・No. of vessels equipped with Wind
Challenger : 25 [2030]
・No. of vessels equipped with Wind
Challenger : 80 [2035]

・Improve fuel efficiency by 5%(compared to 2019)[2025]

・Amount removal type carbon credits used
: 2.20 million t-CO2e (cumulative) [2030]

12

Section2

Updates from Environmental Vision 2.1 (1)Clarifying the “Pathway to Net Zero Emissions”

1

2. Overview of Environmental Vision 2.2

34- MOL Group's Decarbonization Strategy in Accordance With the Pathway of Reduction for 1.5 °C The “Pathway to Net Zero Emissions” specifically shows reduction pathways for achieving net zero by 2050.
This time, we enhanced the resolution to visualize the degree of contribution of each action.
By doing so, we present the transition plan for the MOL Group to achieve net zero more clearly .
MOL Group’s Pathway to Net Zero GHG Emissions
Vertical axis: GHG emissions

Reduction through operation efficiency andintroduction of energy-saving equipment
Reduction through LNG and methanol→ e/Bio-methane/methanol

Enhanced
resolution

Reduction throughammonia and hydrogen

Net emissions*2
As of MOL Group Environmental Vision 2.1(announced in June 2021)

Scope 1/2 emissions*1

2019

2025

2030

Efficiency improvements
mainly focused on windpropulsion:

approx. 20%

Adoption of clean energy:

approx. 70%

Reduction throughbiofuels
Less than 10% residual

2035

Carbon Dioxide Removal

2050

Neutralization throughcarbon dioxide removal*1 Scope: MOL and all consolidated subsidiaries. Scope 3 emissions are also included in the 2050 net zero target.
*2 For the calculation of emissions for years prior to the target year of 2050, emissions will not be offset with carbon dioxide removal. See the Appendix (⇒P.45) for details.
13Section2

Updates from Environmental Vision 2.1 (2)Establishing KPI & Milestones

１

2. Overview of Environmental Vision 2.2

3

4

To ensure the achievement of net-zero emissions, we have set quantitative KPIs and milestones
for measuring progress for each action.
KPI:
No. of alternative fuelpowered vessels

Adopt
clean energy2030

No. of LNG/methanol-fueled
ocean-going vessels

90 vessels

Milestone

2035

2030

KPI:

2030

100%
2025

KPI:
Fuel efficiency
Efficient
operations
Build businessmodels thatenable net zero
emissions25

80

vessels

vessels

KPI: No. of vessels
equipped with Wind
Challenger(Energy consumption per ton-mile)

KPI

130 vessels

Net zero emissions for theentire Group5%

Ratio of power fromrenewable energy for Scope 2[Legend]

2050

2030

KPI:
Ratio of zero-emission
fuel used

Further adopt
energy-saving
technologies

2035

No. of net zero emissions
ocean-going vessels−5%(compared
to 2019)

KPI: Amount of removal
type carbon credits used

2030

2030

GHG emissions

2.2 mil.

−23%

tons

(cumulative)(compared to 2019)2025

Environmental investment¥650 billion(FY23-25 cumulative)

14

Section 3

Five Actions
to Realize Net Zero

15

Section

3

１

Five Actions to Realize Net Zero2

3. Five Actions to Realize Net Zero4

We will take five actions to achieve our medium- to long-term targets.
Contribution to the Reductionof Society’s GHG Emissions

Reduction of the Group’s GHG Emissions
Further adopt
energy-saving
technologies

Adopt clean
energyShift to low and decarbonizedvessel fuels
Proactive introduction ofelectricity from renewable sources

Adoption of innovative energysaving technologies, primarily thosethat utilize wind power, such as theWind Challenger system

Expand low-carbon /decarbonized business byleveraging the Group’s collective
strengths

Efficient
operations
Promoting operation efficiency
through the DarWIN Project,which aims to improve fuelefficiency

Business development in the field of
next-generation fuels, such as offshore
wind power farm projects, hydrogen,and ammonia

KPIs for measuring action progress
・No. of LNG/methanol-fueled
ocean-going vessels･ No. of net zero emissions
ocean-going vessels･ Ratio of zero-emission fuelused･ Ratio of power fromrenewable energy for Scope 2・No. of vessels equippedwith Wind Challenger･ Fuel efficiency

Build business models that enable net zero emissions
Carbon dioxide removal initiatives, appropriate response to carbon pricing,
active involvement with industry organizations, etc.

KPI : Amount of removal type carbon credits used16

Section

3

Action 1: Adopt Clean Energy

１2

3. Five Actions to Realize Net Zero4

- MOL Group Approach ◼ We will phase out the useage of heavy oil, which is highly carbon-intensive, and shift to low-carbon and decarbonized fuels.
◼ Based on the premise that the optimal fuel differs depending on the type of vessel and shipping route, we have begun
considering adopting a variety of fuels.

◼ In addition to preparing alternative fuel-powered vessels, we will take measures to procure clean-energy fuels.
Composition of MOL’s Ocean-Going Fleet by Fuel Type
Vertical axis: No. of vessels

2030 Ratio of zeroemission fuel used: 5%
Introduction of 2030 No. of LNG/methanolalternative fuels fueled ocean-going vessels: 90
Milestones

Start reducing
emissions now byusing LNG ande/biomethanol

2035 No. of net zero emissions
ocean-going vessels: 130

Increased use of e/bio
methane, shifting from
LNG (fossil fuel)

Increased use ofammonia and hydrogen fuels

For details of the milestones, see the Appendix. (⇒P.45)

Oil fuels

Bio-diesel

Ammonia/hydrogen

e/Bio methane / methanol

LNG

17

Section3

Shift to Alternative Marine Fuels

１2

3. Five Actions to Realize Net Zero

- Development and introduction of alternative fuel-powered vessels (1) -4

Action 1: Adopt clean energy◼ For a general shipping company such as MOL, which operates various types of vessels, there is no single solution for vessel
fuel. We will promote the adoption of optimum fuels for each business on the premise of achieving net zero in 2050 and ourinterim milestones.

LNG

MethanolWe are proactively using LNG, a low-emission fuel that is available

We own one of the world’s largest fleets of methanol-fueled transport

for immediate utilization as a way of contributing to the carbon
budget. As of April 2023, we operate 16 LNG-fueled ocean-goingvessels, including car carriers and large bulk carriers(including those under construction).
LNG-fueled “BLUE” series car carrier(Eight vessels are slated to becompleted by 2025)

In terms of coastal ships, 2 LNG-fueled ferries
have commenced operation.
We plan to enter two more LNG-fueled ferries
into service in the future.
Japan's first LNG-fueled ferry "Sunflower Kurenai”

Reducing methane slip

We are making multiple efforts to further reduce a trace amount of unburned
methane emitted from LNG-fueled engines (methane slip).
･ Joint projects with Japanese companies to develop technology to reduce methane
slip by improving catalysts and engines･ We are a member of The Methane Abatement in Maritime Innovation Initiative, agroup which promotes the development of methane slip reduction technology
through collaboration among global companies

vessels (5 vessels). We plan to use our know-how to expand methanol
fuel to other types of vessels.

Completed methanol transport vessel
which uses primarily methanol fuelBiodiesel
We promote the use of biodiesel as a“drop-in fuel” which can be used withconventional petroleum-fueled
equipment.
MOL completed the first biodiesel
bunker operation for a vehicle
carrier in Singapore.

18

Section3

Shift to Alternative Marine Fuels

12

3. Five Actions to Realize Net Zero

- Development and introduction of alternative fuel-powered vessels (2) -4

Action 1: Adopt clean energy

Ammonia

Hydrogen

We are developing multiple types of vessels. One of them isscheduled to be completed and put into operation around 2026 as
the first net zero emissions ocean-going vessel.

We are building a coastal passenger ship propelled by hydrogen and biofuels.

We obtained Approval in Principle (AiP) foran ocean-going liquefied gas carrier fueledby ammonia.

We obtained Approval in Principle (AiP) for
an ammonia-fueled large bulk carrier.

The ship will start operation in the Kanmon area of Japan in FY2024.

Rendering of an electric-propelled hybrid vesselthat uses hydrogen and biofuels.

Planned to be owned andutilized by MOTENA-Sea(Largest shareholder : MOL
Techno-Trade, Ltd., oursubsidiary)

Battery
The pure battery coastal tanker “Asahi,” powered by large-capacity
lithium-ion batteries, is scheduled to enter operation in spring 2022.
The second ship "Akari" put in service in April 2023, and the delivery
of hybrid EV bulk carrier “Asuka” is scheduled in May of the sameyear.
"Asahi,” the world's first EV tanker

e5 Project

By bringing together technicalcapabilities and networks related toelectric vessels, e5 will establish astandard for sustainable marinetransport.

19Section3

Shift to Alternative Marine Fuels

１

2- Efforts to Procure Alternative Fuels -3. Five Actions to Realize Net Zero

4

Action 1: Adopt clean energy◼ In addition to working on the development and operation of vessels from the perspective of fuel users, we will
work with diverse partners to urge upstream players of the fuel supply chain to join our efforts to expand theuse of new fuels.
e/Bio-methanol

e/Bio-methaneWith our long-standing partnership with Methanex, the world's largest

We promote efforts to procure e/bio-methane produced in Japanmethanol supplier, we conducted the world's first net-zero voyage of aand overseas. We aim to test liquefied bio-methane, produced bymethanol dual-fuel vessel fueled by bio-methanol. We will also pursue

Air Water in Hokkaido’s Tokachi area, for a MOL group coastal

the viability of e-methanol in the future.

LNG-fueled vessel in the first half of FY2023.

Partnership with
Methanex and MOL conducted the world’s first
net-zero voyage using bio-methanol.

We launched a joint study on the use ofliquefied bio-methane as marine fuel.

Ammonia
Together with ITOCHU Corporation, Total Energies, Pavilion Energy,

and Vopak, we are involved in a joint development project on theammonia fuel supply chain in Singapore.

Advanced Initiatives to Promote the Use of Clean Alternative Fuels- First Japanese Shipping Company to Join First Movers Coalition in the
Shipping Sector(Jan.2023) -Member shipping companies have set a target of using zeroemission fuels for at least 5% of their deep-sea shipping by 2030.

Partnership with
We obtained Approval in Principle for anammonia fuel supply vessel to realize anammonia fuel supply business in Singapore.

20

Section

3

Utilization of Clean Energy
Outside of Marine Shipping

１

2

3. Five Actions to Realize Net Zero

4

Action 1: Adopt clean energy◼ We are also promoting the use of clean energy in businesses such as real estate and logistics.
Utilization of power derived from renewable energy
Power fromrenewableenergyMilestone

Increase the ratio of power from renewable energy for Scope 2 to 100% by 2030
KPI: Ratio of power from renewable energy for Scope 2
We will promote the use of renewable energy for power through the introduction of renewable energy generation systems,
CO2-free power, the acquisition of environmental certificates, etc.
Ratio of Scope 2 Emissions by Segment
2%
6%
Total

35,887
t-CO2
Solar power system at Tokyo
International Container Terminal

Daibiru office building with solar power
generation and CO2-free electricity

Utilization of hydrogen fuel for port cargo handling equipment
In anticipation of the proliferation of hydrogen supply infrastructure in the future, we introduced a“Near Zero Emission Transtainer®,” a port cargo handling machine that can achieve zero emissions bychanging the power source from diesel engines to hydrogen fuel cell power units.

38%

54%

Real estate
Logistics
Marine shipping
Other
Scope: MOL Group consolidated

Image of “Near Zero Emission
Transtainer®”, delivered to Kobe
International Container Terminal inAugust 2022 and scheduled to bedelivered to Yokohama Port around
October 2023.

For details of the milestone, see the Appendix. (⇒P.46)
21

Section

3

Action 2: Further Adopt Energy-saving Technologies- MOL Group Approach -１

3. Five Actions to Realize Net Zero2

4

◼ We will focus on wind, a clean and inexhaustible form of energy that we can begin utilizing immediately.
◼ Under the banner of Wind Challenger, we aim to be the leader in the use of wind power for vessels.

Wind power
utilization
Milestone

No. of vessels equipped withWind Challenger

What is Wind Challenger?
• A wind propulsion device
developed by MOL

2030: 25 vessels
2035: 80 vessels

2022

2024

2025

First vessel

Secondvessel3 vessels• First vessel to start operation in
the fall of 2022

2030

2035

2050

• We expect the first vessel to cut
emissions by 5 to 8%

25 vessels 80 vessels Entering a New Stage ofWind Power Utilization
Annual productionof 10 units

Weight reduction, commercialization,and establishment of production system

Development of ship types specialized
for mass production and wind power
utilization (See the next page for details.)⚫ We are considering installation on various sizes of bulk carriers, LNG carriers, tankers, and clean energy carriers.
⚫ In addition to the Wind Challenger, we introduced optimal technology that includes other wind power devices suchas rotor sails, taking into account the characteristics of each vessel.

For details of the milestone, see the Appendix. (⇒P.46)
22

Section

Future Vision of Wind Power3- New era’s sailing vessel which continues evolving -１

2

3. Five Actions to Realize Net Zero

4

Action 2: Further adopt energy-saving technologies◼ From 2035, while mass-producing Wind Challenger, we will aim to develop next-generation vessel models specialized inutilizing wind power to become a forerunner in a world where fuels are transitioning to clean energy.

This MOL Group technology development
slogan expresses our intention to movesteadily forward “one mile” at a time, aiming to
be “one mile” ahead in technology.

Equipped with Wind
Challenger withmultiple sails⚫
⚫

Bridge positioned at
the bow ensures
visibility

It is a mission of the shipping industry to reduce the fuel consumption of vessels
by using natural energy. We will utilize wind power while shifting fuels to clean
energy.
In the development of vessels that run on next-generation clean energy such asliquefied hydrogen, we aim to maximize the utilization of wind power, or in otherwords, to develop fundamental ship models with the aim of equipping multiple
sails as well as adopting autonomous navigation technology.
23

Section

3

Action 3: Efficient Operations

１

3. Five Actions to Realize Net Zero2

4

- MOL Group Approach ◼ We will improve fuel efficiency by promoting operation efficiency (the DarWIN project) and pursue measuresthat we can take immediately to reduce GHG emissions.
Improve fuelefficiency
Milestone

Improve fuel efficiency by 5% as of 2025 (compared to 2019)
KPI: Fuel efficiency (unit: megajoules/ton-miles)

Progress toward the milestone

DarWIN Project Overview[Changes in Fuel Efficiency Improvement Index]

Digital Approach to Reduce GHG With Integrated Network

Progress with FY2019 as 100

This project was named after Darwin’s theory of
evolution in reflection of how our initiatives areconstantly evolving and adapting to an
environment that is dramatically changing.

100
97.7

97.2

-2.3％

-2.8％

Specific initiatives (details on the next page onwards)
・Pursuit of optimal operations

95
-5.0％

FY2019FY2020

FY2021For details of the milestone, see the Appendix. (⇒P.46)

As of 2025

・Active investment in and installation of energy-saving technologies andequipment
・Steady promotion through collaboration with other companies
・Participation in Consortiums (Blue Visby Consortium)

Related information● DX Vision(Link to our website)

24Section

3

１

Initiatives for Efficient Operations

2

3. Five Actions to Realize Net Zero

4

Action 3: Efficient operations◼ We pursue optimal operations based on the three pillars of systems, structures, and processes.
◼ By 2025, we will invest approximately 10 billion yen in energy-saving technologies and equipment to reduce
GHG emissions.

Pursuit of optimal operations
Systems

Structures

Obtain high-granular data through the
FOCUS Project

Visualize vast amountsof fleet data

Processes

In addition to a dedicated team, weestablished a new company in thePhilippines.

Processes for achieving optimal
operations

Promptly share andrequest action by thevessel to ensure optimalroute and output

Analyze data and secure resources to put
efficient operations into practice

Active investment and installation of energy-saving technologies and equipment
Combining a wide variety of measures that are expected to reduce GHG emissions by 1% to 10%, we will implement optimal improvement measures for each vessel.

Example of measures
Hull attitude optimization during navigation
Replacement with energy-saving propellers “Example 1”

Improved propulsion performance via hull surface blastingtreatment “Example 2”
Improved propulsion performance by cleaning the vessel
bottom and propellers

Fuel-efficient and environmentally friendly
hull coatings
Devices to improve propeller propulsion
performance “Example 3”
Energy-saving steering system
Other energy-saving propulsion
equipment

Example 1

Example 2

Example 325Section

3

Collaboration with Other Companies to
Realize Efficient Operations

１

2

3. Five Actions to Realize Net Zero

4

Action 3: Efficient operations◼ Through collaboration of 11 companies and utilizing the strengths of each company, we will improve fuel efficiency and reduce
GHG emissions steadily.
◼ We will participate in consortium and contribute to the realization of a low-carbon society by working to reduce GHG emissions.
Steady promotion through collaboration withother companies
We systematically introduce and evaluate energy-saving equipment toimprove fuel efficiency and reduce GHG emissions steadily.

Overall Supervision of DarWIN Project

Participation in Consortiums
MOL is a member of the Blue Visby Consortium, which comprises 24 organizations(as of February 2023) from industry, government, academia, NGOs, NPOs, etc., inorder to support the development of a system to optimize vessels’ arrival times attheir destinations.
By adjusting (slowing) the sailing speed of vessels, we aim to optimize anddisperse the arrival times of vessels heading to the same destination port, thereby
reducing fuel consumption and GHG emissions.*

Simulation of the number of waiting vessels
Advanced analysis capabilities
utilizing vessel technology researchand engineering methodologies

Technical resources backed
by a wide variety of services

Provision of optimal measures for improvement

Arrival times not optimized

Arrival times optimized*Analyzing 150,000 voyages made by 13,000 vessels in 2019, the Consortium found that
waiting time could be reduced for approximately 87% of the voyages by adjusting (slowing)
the sailing speed.
26

Section

3

Action 4: Build Business Models that Enable Net Zero Emissions- MOL Group Approach -１

2

3. Five Actions to Realize Net Zero

4

◼ In addition to making every effort to reduce the Group’s emissions (See Actions 1, 2 and 3.), creating mechanisms
which enable net zero is highly meaningful for the purpose of enhancing the effectiveness of those actions.

◼ For this reason, we are pursuing a variety of initiatives for Action 4 as described below.
Carbon Dioxide Removal(CDR) Initiatives

Appropriate Response to Carbon Pricing

We are actively participating in projects to remove and sequester CO2

Since the introduction of carbon pricing is anticipated for internationalfrom the atmosphere. (⇒P.28-30)

shipping in the 2020s, we are making preparations to ensure we canrespond smoothly. (⇒P.31)

Engagement with Policymakers and Industry Organizations

Participation in International Initiatives

We take an active role in international marine transportation bysubmitting our opinions through industry organizations to theInternational Maritime Organization (IMO), a regulatory authority. (⇒P.31)

We aim to collaborate not only with the shipbuilding and maritime
industries, but also with other industries such as the energy industry, andwe actively participate in international initiatives. (⇒P.31)

Collaboration with Value Chain Partners
We work to reduce Scope 3 emissions through active supplierengagement.
<The Group's main Scope 3 emissions>Category 3:
Emissions generated in the production process of fuels consumed
Category 11: Emissions from marine fuels sold by the Group
Category 2:
Emissions from the building of vessels owned by MOL
Accelerating Shipping Decarbonization and the Global Transition session at the Davos Forum
MOL President Hashimoto on stage as a panelist (second from right)

27Section

3

Initiatives for Carbon Dioxide Removal(CDR)

１

2

3. Five Actions to Realize Net Zero

4

Action 4:
Build business models that enable net zero emissions◼ In addition to reducing emissions from the value chain, including MOL, we engage with CDR to contribute to
the mitigation actions beyond the value chain (BVCM*1).

◼ In order for society as a whole to achieve net zero, CDR needs to be significantly scaled. Our direct involvementin CDR ensures the neutralization of our future residual emission*2 and contributes to the broader adaptationof CDR projects across our society.
Reduction ofMOL’semissions

Beyond value
chain mitigation

Scope 1 & 2
emissions reduction(⇒Actions 1-3)

Scope 3emissions
reduction

Low-carbon and decarbonizedbusiness development(⇒Action 5)

Initiatives forcarbon dioxide removal

MOL initiatives for carbon dioxide removal
Carbon Dioxide Removal(CDR) refers to the removal andsequestration of CO2 from the atmosphere and can bedivided into two broad categories: nature-based solutions,which increase CO2 absorption by forests and other naturalcarbon sinks, and technology-based ones , which remove
CO2 from the atmosphere using chemical/engineering
technologies . We are proactively involved in both solutions .

Neutralization
Created by MOL with reference to the“Corporate Net Zero Standards (Mitigation
Hierarchy)” presented by SBTi(⇒ P. 30)

*1 Abbreviation of Beyond Value Chain Mitigation (⇒P.46)*2 MOL aims to reduce those emissions to less than 10% of those of 2019, the base year. (⇒P.46)

28

Section

3

Quantitative Milestones

１2

3. Five Actions to Realize Net Zero

4

Action 4:
Build business models that enable net zero emissions- Our contribution to society through CDR-

◼ Given the limited remaining carbon budget, we believe it is important to engage with CDR from now,
without delay, in order to support the scaling of CDR (⇒P.3).

◼ Therefore, we have set an interim milestone to achieve by 2030 and will promote related initiatives.
CarbonDioxideRemovalWe will contribute to the removal of a cumulative 2.2 million tons of CO2 by 2030.
KPI: Amount removal type carbon credits used

Milestone

We will reduce our emissions based on thescientific abatement-curve. Additionally, we takethe initiatives to contribute to the society's
mitigation actions and do not use them tocounter-balance our own emissions.

2030
2.2 million
tons

29

Section

3

Initiatives for Carbon dioxide removal- Major initiatives -１

2

3. Five Actions to Realize Net Zero

Action 4:
Build business models that enable net zero emissions

Nature-based Solutions

Technology-based Solutions

By supporting projects such as forest and mangrove
restoration, we will contribute not only to decarbonization but
also to other co-benefits, such as the protection of biodiversity
and the improvement of livelihood of local communities.

By engaging with CO2 removal technology projects now,
we will contribute to innovation and cost reduction ofunderfunded elements of nascent technologies.

Mangrove Restoration & Conservation Project

Link to related
releases

Since January 2022, we have been participating in a blue carbon project
aimed at restoring and conserving mangroves in South Sumatra,Indonesia. The project aims to reduce CO2 emissions by about 5 million
tons through forest conservation activities and to absorb/store another 6
million tons of CO2 through afforestation of mangroves and other plants
on about 9,500ha of bare land in the next three decades.

4

Effort to scale up and catalyze the market

Link to related
releases

In May 2022, we participated in the NextGen CDR Facility, whichaims to proliferate and promote carbon removal technologies, as afounding buyer. We are committed to purchasing at least 50,000
tons of CO2 removals utilizing CDR technologies by 2030.

30

Section3

Build Business Models that Enable
Net Zero Emissions

１

2

3. Five Actions to Realize Net Zero

4

Action 4:
Build business models that enable net zero emissions◼ In the shipping industry, carbon pricing is expected to be introduced in the 2020s.
◼ In order to realize the introduction of a truly effective mechanism for the decarbonization of the shipping
industry, we will promote dialogue with industry organizations and regulatory authorities to fulfill our
responsibilities as a leading company in the industry.
Involvement with Policymakers and Industry Organizations / Participation in International Initiatives•

Regarding the question of how we can smoothly introduce a carbon pricing system thattakes into consideration the actual state of the shipping industry from the perspective of
shipowners and operators, we are engaged in continuous dialogue with the IMO byproviding opinions via industry organizations.

•

At events hosted by the Getting to Zero Coalition* etc., we continue to actively express
our intention to strive for decarbonization.

•

We are actively participating in international initiatives to collaborate widely with not only
the maritime industries but also other industries to achieve net zero.

Examples of Initiatives We Are Participating in (Year of participation)• World Economic Forum (September 2021)• First Movers Coalition – Shipping (January 2023)• First Movers Coalition – Carbon Dioxide Removal (June 2022)• Getting to Zero Coalition (June 2020), etc.
*A coalition of companies aiming to decarbonize shipping, with members from awide range of sectors such as maritime, energy, infrastructure, and finance.

Appropriate Response to Carbon Pricing
Internal Carbon Pricing (Introduced in FY2021)

EU-ETS Compliance

By quantitatively evaluating the impact of carbon prices andWe quantitatively evaluate the financial impact of the introduction ofincorporating them into management decisions such as investments, we

the EU-ETS and disclose the results within the TCFD framework. In

are promoting low-carbon

addition, we are collaborating with local

and decarbonization projects

Related information (Link to our website)● Internal Carbon Pricing System

as well as low-carbon / decarbonized services.

subsidiaries in Europe to develop practicalsystems after this is introduced.

Related information(Link to our website)● Disclosure based on TCFD
recommendations

31Section

3

Expand Low-carbon and Decarbonization
Projects - MOL Group Approach -１

2

3. Five Actions to Realize Net Zero

4

Action 5: Expand low-carbon/decarbonized business byleveraging the Group’s collective strengths

In addition to steadily reducing MOL Group’s emissions (Actions 1, 2 & 3) and creating mechanisms to improve theeffectiveness of those actions (Action 4), we will also contribute to the reduction of emissions in society through ourbusiness.
Responding to and leveraging the global shift in energy sources, we aim to realize a “Green Ocean Shift”
and contribute to clean energy supply chains from upstream to downstream.

Global economic
development driven
by fossil fuels

Increased LNG use particularly in emerging countries / Increased use of renewable energy / Popularization of electric vehicles/ Increased use of hydrogen / Higher percentage of electric furnaces and rise in hydrogen-reduced iron /Spread of carbon dioxide removal technologies

Global shift in energy sources“Green Ocean Shift” of MOL
Existing marinetransportation,etc.

New business domains Ocean Clean Energy Business

Building Ammonia & Hydrogen supply chains / Offshore wind power business /Involvement in CCS/CCUS projects / LNG powerships / Ocean thermal energy conversion, etc.

32Section

3

1

Overview of Ocean Clean Energy BusinessAmmonia2

3. Five Actions to Realize Net Zero

4

Action 5: Expand low-carbon/decarbonized business byleveraging the Group’s collective strengths

HydrogenWind power, Other

Offshore wind power / Ocean thermal energy conversion projects

Production
Generating
Clean Energy

Delivering

Storage
SupplyMarinetransport

Clean Energy

Liquefied CO2 carriers (CCUS business)
Involvement in ammonia
production/supply projects(Blue/Green)

Ammonia carriers

Liquefied hydrogen carriers

Ammonia FSRUs

Chemical tankers (MCH)
Tank containers (MCH)(Ammonia fuel / LPG fuel /Ammonia & liquefied CO2 carriers)(Floating storage andregasification units)

Storage
SupplyUtilizing

Wind Hunter

Hydrogenproduction
and supply
businessAmmonia FSUs

(Floating storage units)

Ammonia bunkering vessels

Use
Ammonia-fueled vessels(SEP/SOV/CTV/Cable-laying
vessels/temporary staffing)

Transportation of wind
power equipment(Land transportation / Logistics)

Clean methane production and supply business

Clean methanol production, supply,
and transportation business
LNG/ethane transport

Biomass fuel transport

Liquefied hydrogen FSRUs

LNG FSRUs(Floating storage andregasification units)(Floating storage and regasification units)

LNG bunkering vessels

Hydrogen-fueled
powerships

Ammonia powerships

Clean Energy

Offshore wind power
adjacent projects

LNG-fueled
powerships

e5 ProjectUse in ports

Introduction of alternative fueled-vessels

Hydrogen-fueled vessels

Wind Challenger

33

Section3

Constructing Supply Chains for Ammonia& Hydrogen - Major Initiatives MOL Concludes MoU on Building
Hydrogen/Ammonia Value Chain in
ThailandCollaboration with the Electricity

Generating
Clean Energy

Delivering

Generation Authority of Thailand,
Mitsubishi Company (Thailand) and1

3. Five Actions to Realize Net Zero

2

Action 5: Expand low-carbon/decarbonized business byleveraging the Group’s collective strengths

MOL Demonstrates Ammonia Supply
Chain Linking UAE and Japan

Offshore Hydrogen Production and Supply- SeaEra Project -Demonstrated power generation
using clean ammonia that the UAE

Investigated the introduction of coastal

produced and exported to Japan

ships that can use renewable energy toboth produce and supply hydrogen
offshore

Chiyoda Corporation

MOL Teams up with JERA Co., Ltd. to
Study Transport of Ammonia Fuel

Started joint development on construction ofa net-zero emission ocean-going vessel

Considered developing largeammonia carriers and establishing a

Began joint development for construction of an ocean-goingliquefied gas carrier fueled with ammonia

safe transport system

MOL Signs Deal for Construction of LPG Fueled CVLGCs for
LPG/Ammonia Transport

Clean Energy

4

MOL to Start Development of Large-size Ammonia Carrier Powered byAmmonia Fuel
MOL Participates in a Project to Explore
Development of Infrastructure for
Supplying Liquefied Hydrogen in Singapore
Evaluated and considered an infrastructure

Utilizing
Clean Energy

project which includes liquefied hydrogentransportation, import terminals, storage

MOL Completes Concept Study of 'Ammonia/Liquefied CO2 Carrier'Rendering of LPG/ammonia carrier
Designed by Mitsubishi Shipbuilding Co., Ltd

units, regasification facilities, etc.

34Section

3

Offshore Wind Power-Related Business１

3. Five Actions to Realize Net Zero

2

Action 5: Expand low-carbon/decarbonized business byleveraging the Group’s collective strengths- Major Initiatives Overview of the Offshore Wind Power Business Value Chain
and MOL Group Initiatives

MarineConsulting

Investment in Power Generation Business・Develop a floating offshore wind power project generating a
total of 2GW.(Collaborate with Flotation Energy)・Acquisition of shares of the company operating the
Formosa 1 offshore wind farm.
・Made an investment related to the Kitakyushu
Hibikinada offshore wind farm.
(Collaborate with Hokutaku)
Maintenance(Personnel development& supply)
Personnel Development and Supply forWind Power Maintenance

Established a personnel consulting
company in cooperation with Magsaysay
Group (Philippines)

4

Sea Area Survey & Selection Support
Support for selection of expected businessareas from the standpoint of marine consulting

Integrated Marine/Ground
Transportation ofWind Power Equipment

Development& Operation

Integrated
Marine/Ground Total support for ground/
Transportation
marine/air transportation,
port cargo handling,customs clearance,
installation, etc.

Asia’s First SOV BusinessThis business is involved in operation andmaintenance support work for an offshore windfarm in Greater Changhua (Taiwan)
Ownership, Management and Operation of CTV
Involved in development to provide engineertransportation services adapted to sea and weather
conditions unique to Japan

Maintenance(Engineer transport)

Layingtransmission
cablesPower Cable Laying Vessel Business
Promote the commercializationin order to meet growing demand35Section

3

Involvement in CCS/CCUS Projects

１

3. Five Actions to Realize Net Zero

2

4

Action 5: Expand low-carbon/decarbonized business byleveraging the Group’s collective strengths- Major Initiatives MOL Initiatives for the Development of Liquefied CO2 Carriers
Completion of concept study of liquefied CO2
carrier that can be the mainstream carrier in themarket (Nov. 2021)

MOL and Mitsubishi Shipbuilding obtain
Approval in Principle (AiP) for liquefied
CO2 Carrier (Sep. 2022)

CCS/CCUS Value Chain Construction Projects

Rendering of a liquefied CO2 carrier

MOL Signs MoU to Study Ocean Transport forDevelopment of CCS Value Chain

Collaboration in liquefied CO2 marine transportation business in
the Asia-Pacific region

Study of marine transportation of liquefied CO2
to potential storage sites, targeting CO2
emitted by The Kansai Electric Power Co., Inc.’s
thermal power plants

Collaboration for business development to transport
CO2 emitted in Singapore via ship to a storage site off
the coast of Australia, with Chevron

Involvement in R&D
We started R&D of a large-scale liquefied
CO2 carrier and obtained Approval in
Principle as part of the NEDO demonstration
project entrusted by Japan CCS Co., Ltd.
Cross-industry Initiatives to Establish a Supply
System for Synthetic Methane

Led the Ship Carbon Recycling Working Group of
the Carbon Capture & Reuse (CCR) Study Group

Collaboration for development of a liquefied CO2
marine transport business to realize CCUS, withPetronasSigning ceremony with Chevron

Participation in the Australian offshore CO2 capture andstorage hub project "deepC Store"

We are participating in this project which captures, liquefies, and ships CO2
generated from industrial facilities in Australia and the Asia-Pacific region for longterm underground storage.

36Section

3

Diverse Ocean Clean Energy Business１

3. Five Actions to Realize Net Zero

2

4

Action 5: Expand low-carbon/decarbonized business byleveraging the Group’s collective strengths

Ocean Thermal Energy Generation Project- Toward the Realization of a Decarbonized Society and a Symbiotic Sphere of Regional Circulation -Generating
Clean Energy

Together with our partners, we are participating in the operationof an ocean thermal energy conversion (OTEC*1) demonstration
test facility on the island of Kumejima, Okinawa Prefecture. OTEC
is characterized by the fact that the deep ocean water used for
power generation can be reused for purposes other than power
generation, such as fisheries and agriculture.
In addition to deploying the Kumejima Model, which combines
OTEC with the reuse of deep ocean water, to the world, we aim tostart operation of the world’s first commercialized OTEC on a 1
MW scale by around 2026.
OTEC Demonstration Facility(Kumejima)

Rendering of floating OTECLNG Powership - Contributing to the Energy Transition of Emerging Countries MOL has partnered with Turkish firm Karpowership to deploy an LNG powership business.
LNG powerships supply gas to powerships through FSRU*2 and provide power generated at
sea to land facilities. Taking advantage of the mobility of these vessels, we will contribute to
the supply of low-environmental impact power sources to regions where it is difficult tobuild onshore power plants, etc. through LNG power generation.

Delivering &Utilizing
Clean Energy*1 A method by which power is generated using the difference in temperatures between upper and lower layers of seawater*2 Floating LNG Storage Regasification Unit

KARMOL LNGT POWERSHIP AFRICA deployed
to Senegal LNG powership project37

Section

3

Shape the Future With Wind and Hydrogen.

１

3. Five Actions to Realize Net Zero

2

4

Action 5: Expand low-carbon/decarbonized business byleveraging the Group’s collective strengths- Wind Hunter Project - The ultimate zero-emission projectPowered by the wind and produce hydrogen. Dream vessels that don't need bunkering start moving toward realization.

At sea◼

The Wind Hunter project is the ultimate zero-emission project
combining sail technology, which uses offshore wind energy, andstable energy utilization technology, which leverages hydrogengenerated by wind energy.

◼

By pursuing the potential of offshore wind power, we will actively
participate in the development of clean energy supply chains andcontribute to the realization of a decarbonized society.

Hydrogen production/storage⚫ When the wind is blowing strongly, the vessel navigates by wind power
while using wind power to spin turbines in the water to generate electricity
and produce hydrogen which is then stored.
⚫ When the wind is weak,the vessel uses that stored hydrogen as a fuel cell
generating power for the propellers.

At ports

Yacht “Winds Maru” sailing in
Omura Bay, Nagasaki
Prefecture.
A demonstration using a yacht
was completed in December
2021. A 60-70m-classhydrogen-producing vessel
with multiple sails is planned tobe constructed as early as 2024.

Hydrogen supply⚫ We are also considering supplying hydrogen produced and stored on
board for onshore use in the future.

38

Section 4

Natural Capital/Biodiversity

39

Section

4

MOL Group Approach１- Living in Harmony with Nature* -2

3

4. Natural capital/biodiversity◼ Recognizing the impact of our business on nature, we regard not only climate change but also biodiversity, air
pollution, and the marine environment - which is closely tied to marine transportation, our primary business as broad environmental issues.

◼ We will also discuss and deliberate on natural capital and biodiversity in a similar way to climate change (⇒P.9).
Map of the Relationship Between MOL Group and Biodiversity (marine transportation)
Pollutant emissions (soil, air, water)
Vesselprocurement

OUTPUT• Built and procured in accordance with MOL safety standard
specifications• Joint development of alternative fuel-powered vessels, etc.

Main value
chain formarinetransportation

Vesseldisposal

Energy resources / Natural resources INPUT• Promote efficient operations• Introduce energy-saving equipment, etc.

Vesseloperation

Pollutant emissions (air)GHG, SOx, NOx, etc.

OUTPUT• Create inventory lists of hazardous substances,• Select yards that comply with the Ship
Recycling Convention, etc.

・Utilizing the TNFD* framework and otherresources, we began analyzing ourdependencies and impacts on nature, as well as
nature-related business risks and opportunities.
・We are implementing multifaceted efforts thatcan be taken immediately to reduce our

OUTPUT• Introduce clean energy• Procure low-sulfur fuel• Install NOx removal systems, etc.

Pollutant emissions(soil, air, water)

Current Initiatives and Policy Going Forward

Pollutant emissions (water),ballast water, ship bottom
OUTPUT
paint, etc.
• Properly treat ballast water• Avoid use of designated substances in shipbottom paint• Properly dispose of waste oil and other waste, etc

business impacts on nature (⇒P.42).
・We have established quantitative milestones (⇒P.41),
and will continuously improve our targets and KPI
based on the latest international dialogues.
Related information (link to our website)● MOL Sustainability Plan

See the Appendix (⇒P.46) for terms marked with an asterisk (*).

Created by MOL with reference to the “Business & Biodiversity Interrelationship Map®” developed by the Japan Business Initiative for Biodiversity (JBIB)

40

Section

4

Quantitative Milestones

Reduction of
air pollutants

１

2

3

Reduce SOx* emissions intensity by 14% by 2030 (compared to 2020*)
KPI: SOx emissions per ton-mile (g-SOx/ton-mile)

4. Natural capital/biodiversity

SOx emissions intensity results⇒P.49

・In addition to complying with international regulations*, we have voluntarily set a milestone for reducing air pollutants.
・We aim to achieve this by promoting the reduction of fuel consumption through efficient operations and by shifting to fuelswith low sulfur content, such as LNG and ammonia.

Resource use
and energy use
efficiency

Improve fuel efficiency by 5% by 2025 (compared to 2019)
KPI: Fuel efficiency (energy consumption per ton-mile)

Fuel efficiency results⇒P.49

・Recognizing that marine fuel is a valuable energy resource, we aim to effectively utilize fuel as an energy resource and improveenergy efficiency through operation efficiency (⇒from P.24) and introducing energy-saving equipment (⇒from P.22).

Biodiversity
index

・We manage the ratio of vessels equipped with ballast water management system, and disclose the progress on
this on our website.
・As of FY2021, that ratio was 91%, and we will complete equipping 100% of MOL Group-owned vessels in FY2023.

See the Appendix (⇒P.46) for terms marked with an asterisk (*) and each milestone.

41Section

4

Specific Efforts to Reduce Impacts

１

2

3

4. Natural capital/biodiversity■ We have already begun implementing initiatives to reduce impacts on nature in our value chain.
■ We will continue improving and deepening our efforts while referring to the AR3T framework*
provided by SBTN* ,etc.
Avoid

SBTN AR3T

・Promote the adoption of clean energy including zero-emission fuels (⇒from P.17) ・Strengthen systems to prevent oil spills
・Dialogue with shipyards to prevent environmental pollution in the ship-recycling process (impact avoidance/reduction program for the value chain).

Reduce・Introduce energy-saving equipment (⇒from P.22) ・Promote efficient operations (⇒from P.24) ・Properly manage ballast water・Properly manage biofouling on vessels・Install onboard SCR (selective catalytic reduction) systems
・Install onboard EGR (exhaust gas recirculation) systems

Restore & Regenerate・Participate in mangrove restoration and conservation project (South Sumatra, Indonesia)
・Purchase "J Blue Credits" to support seagrass restoration and conservation (Japan: Port of Yokohama, Port of Tokuyama Kudamatsu, Hyogo Canal)
・Develop green spaces in Daibiru buildings (Osaka, Japan) ・Install microplastic collection devices on vessels
・Install Seabin, a floating garbage collection device (Hiroshima Port, Japan)・Collect marine debris (Indonesia) ・Coastal cleanup activities (offshore of Kashima, Japan)

Transform
・Participate in initiatives (TNFD Forum, 30by30 Alliance for Biodiversity established by the Ministry of the Environment, etc.)
・Contribute to the development of meteorological service by continuously providing maritime meteorological data to the Japan Meteorological Agency, etc.
・Contribute to an environmental restoration and conservation project and local communities in Mauritius (⇒P.43)
・Have dialogue with shipyards, ship owners, customers, etc. to promote the adoption of alternative fuel-powered vessels
See Appendix (⇒P46) for terms marked with an asterisk (*).

Related information (link to our website)● Preservation of marine environments / Protection of biodiversity

42Section

4

Initiatives in Mauritius- Environmental Restoration and Conservation Project and Contribution to Local Communities -

１

2

3

4. Natural capital/biodiversity■ Since the 2020 oil spill incident by WAKASHIO, a vessel chartered by MOL, we have been carrying out activities
to restore and conserve the environment in the Republic of Mauritius and to contribute to local communities.
■ We will continue to support long-term environmental conservation activities and the development of local
communities through the two funds established for the purpose of supporting the resolution of societal issues.

MOL Mauritius International Fund (Established in Japan)• Support for large-scale project for up to five years• Since the establishment in 2021, we have been callingfor grant projects every year.
• Disclose reports based on social impact assessments• Funded a total of 11 projects in the first year

Contribution of a total of¥800M planned

MOL Charitable Trust (Established in Mauritius)• Support for projects that consider the people of Mauritius• In addition to the environment, we call for more detailed
projects every year in cooperation with the local community,
such as education and employment support.
• Our activities are disclosed in quarterly publications and website• We funded a total of 22 projects in the first year

Related information
Initiatives in Mauritius are
updated on our website fromtime to time.
●MOL for Mauritius

Restoration and conservation ofnature and ecosystems
Mangroves & coral reefs
・Support mangrove and coral reef survey projects by experts and NGOs
・Support environmental restoration projects by local NGOs, etc.

Biological protection and research
Wild birds and rare organisms,
including endemic species
・Implement impact surveys on birds
・Support waterfowl research projects in collaboration with local residents
・Support projects to restore the ecosystems of rare species on the island, etc.

Support for the development oflocal communities
Industrial support and education
・Support fisheries workers and fishery development projects in collaboration with local NGOs
・Support educational facilities and donate picture books and gifts to children

Stakeholder engagement related to natural environment restoration and social contribution in Mauritius
・The steering committee of both funds is made up of experts ・Cooperation with the governments of Mauritius and Japan・Roundtable discussions with environmental NGOs and experts© 2023 Mitsui O.S.K. Lines, Ltd.

43

Appendix

44

Notes on Methodology and Data
P.10 FY2021 MOL Group GHG Emissions•

Scope: Mitsui O.S.K Lines, Ltd. and its major Japanese and overseas consolidated subsidiaries(coverage ratio in terms of consolidated sales: 96%), calculated based on control-approach. Scope 2
emissions are location-based.

•

Subject period: Based on the fiscal year (April to March)•

Conversion factors: IMO 4th GHG study (2018); Ministry of the Environment, Japan, The Calculation,
Reporting, and Publication system & Emissions Intensity Database for Calculating Greenhouse Gas
Emissions of Organizations Throughout the Supply Chain; IDEA v.2; IEA Emissions Factors (2021); etc.

P. 10 GHG Emissions Intensity•

Scope: Mitsui O.S.K Lines, Ltd. and its major Japanese and overseas ocean-going vessel operators•

Definition of “GHG emissions intensity”: The definition used is in accordance with the Energy
Efficiency Operational Indicator (EEOI). It refers to GHG emissions per unit of transport (ton-mile *1)(g/ton-mile). GHG emissions are converted under the GLEC Framework (*2) and include emissions
from the combustion stage (Scope 1) and emissions from the manufacturing stage (Scope 3/
Category 3).
(*1) Ton-mile: A unit of business volume commonly used in the shipping industry. Calculated as
the volume of cargo transported (tons) x the shipping distance (miles).
(*2) GLEC Framework: A framework for calculating supply chain emissions in the logistics sector
provided by the Global Logistics Emissions Council (GLEC).

•

Company-wide total intensity calculation method: Calculated using the following two methods.
1)Standard method: A method designed to correct the impact of difference in absolute value of theintensity derived from the business characteristics of each sector on the calculation of thecompany-wide total value, and to properly reflect the efficiency performance of each sector in thecompany-wide total value. The total value is calculated by the following method.
➢ For the base year: Calculated by dividing the total GHG emissions of all sectors by the total
ton-miles of all sectors.
➢ For target years after the base year: Calculate the EEOI reduction rate compared to the baseyear for each sector. Then, each sector’s contribution ratio to the overall is calculated

according to the business scale calculated based on the energy consumption of each sector,
and the group total EEOI reduction rate is calculated by weighted average using thecontribution ratio of each sector.
2)

Reference method: Calculated by dividing the total GHG emissions of all sectors by the total tonmiles of all sectors (calculated using the same method for both the base year and the target year).

Note: For other detailed environmental data, please refer to the Sustainability Data page of our website(link).
P. 12 & 14 Total GHG Emissions Milestones•

Scope: Mitsui O.S.K Lines, Ltd. and its major Japanese and overseas consolidated subsidiaries (Scope
1 & 2 emissions)P.13 Counting of carbon dioxide removal in Medium- to Long-Term Emission Reduction Targets
In the net-zero target year (2050), net emissions will be calculated by offsetting the remaining grossemissions with carbon dioxide removal(CDR). However, in calculating annual emissions for terms prior tothat, gross emissions will be used, and CDR will not be used to make offsets.
P.17 Milestones for Adopting Alternative Fuels•

Scope: Ocean-going vessels operated by the Group•"Ratio of zero-emission fuel used: 5%": Clean ammonia, e-methanol, e-LNG, and other fuels areenvisioned as candidates for zero-emission fuels.

•“No. of LNG/methanol-fueled ocean-going vessels: 90”: This is the number of vessels fueled by LNG
or methanol. LNG carriers and methanol carriers are not included.

•"No. of net zero emissions ocean-going vessels: 130": Number of vessels with engines that can use
fuels recognized as zero-emission. Clean ammonia, e-methanol, e-LNG and other fuels areenvisioned.

P.17 Change in Composition of MOL’s Ocean-Going Fleet by Fuel Type•"e/bio methane and methanol": e-Methane and e-Methanol is methane/methanol produced bysynthesizing CO2 and hydrogen produced from renewable energy. Bio-methane/bio-methanol ismethane/methanol produced from biomass such as food residues and livestock manure.

45

Notes on Methodology and Data
P.21 Power from Renewable Energy Milestone•

Scope: Scope 2 power emissions for all group business segments on a consolidated basis•”Ratio of power from renewable energy for Scope 2”: The ratio of power from renewable sources topower consumption. In addition to power supplies from renewable energy power generation
facilities, CO2-free electricity and environmental certificate arrangements are also included.

P.22 Wind Power Utilization Milestone••

Scope: Ocean-going vessels operated by the Group•"Fuel efficiency": Energy consumption per ton-mile, measured in MJ (megajoules) per ton-mile. Since
the purpose of operation efficiency is not only to reduce GHG emissions, but also to "reduce fuelconsumption" and "minimize energy used", energy consumption per ton-mile (MJ) was set as a KPI.
In order to measure efficiency improvement performance in the same way whether the fuel used isheavy oil or a low-emission fuel, the same index is used instead of the GHG emissions intensity.

P. 28 Initiatives for Carbon Dioxide Removal•“BVCM”: Beyond Value Chain Mitigation. The basic concept in this document conforms to theframework presented in the "SBTi Corporate Net-Zero Standard" (Oct, 2021). BVCM refers to
mitigation actions or investments that fall outside of a company's value chain, While not accounted
for reductions in emissions within the value chain (Scope 1, 2, and 3 emissions under the GHG
Protocol), BVCM is considered an important climate responsibility as it will add to our chances of
keeping 1.5℃ within our reach.
"Future MOL Residual Emissions": Based on the methodology set forth in this Standard, it isassumed that we will aim for zero gross emissions in the net zero target year (2050), and if residual
emissions occur in the same year, we will neutralize them via permanent carbon removal andsequestration from the atmosphere.

P. 40 Natural Capital / Biodiversity•“Living in Harmony with Nature”: A global goal adopted at COP15 in December 2022, following its
adoption as an Aichi Target“TNFD”: Taskforce on Nature-related Financial Disclosures. An international initiative that calls on
companies to disclose information on business opportunities and risks from the perspective of
natural capital and biodiversity.

P. 41 Air Pollutant Reduction Milestone•

Scope: Ocean-going vessels operated by the MOL Group.

•“SOx”: Sulfur oxide (SOx) is generated when sulfur contained in marine fuel binds to oxygen in theatmosphere during combustion. It is believed that when this is dissolved in, e.g., rain, it causes acidrain, melting the surfaces of buildings and causing adverse impacts on plants and underwater life.

•

Reason for setting 2020 as the base year: Regulations on the maximum sulfur content in marine
fuels was tightened and the upper limit was significantly lowered in January 2020. We set 2020 as
the base year.

•"International regulations": Regulations that control the maximum sulfur content in fuel oil in order
to limit the amount of SOx in exhaust fumes. The regulation values have been gradually tightened.
In January 2020, the regulation value for the maximum sulfur content in general sea areas was
lowered to 0.5%.

Scope: Ocean-going vessels in which the MOL Group is involved (including vessels that are owned
but not operated by MOL in addition to MOL-operated vessels).

P. 24 Fuel Efficiency Improvement Milestone••

P. 41 Milestone for Resource Use and Energy Use Efficiency•

Scope: Ocean-going vessels operated by the MOL Group.

P. 41 Biodiversity Index•"Ballast Water Processing Equipment": In order to minimize the cross-border movement of marineorganisms due intake/release of ballast water when loading and unloading cargo, MOL has been
installing ballast water processing equipment since FY2014, before international regulations cameinto effect.

P. 42 Specific Efforts to Reduce Impact•"SBTN": Science Based Targets Network. Initiatives to develop methods for setting science-basedtargets for a sustainable global system.

•“AR3T Framework”: A series of actions put forward by SBTN for companies to take to first avoid
damages to the natural environment (Avoid), reduce these when these damages cannot be avoided(Reduce), contribute to restoring and regenerating nature (Restore and Regenerate), and transform
fundamental systems (Transform)

46

Notes on Methodology and Data

Rationale for the GHG emissions intensity calculation method for thecompany-wide total value
In calculating the company-wide total value for GHG emissions intensity (EEOI), we
use the two methods previously mentioned, and we have adopted the "standard
method" as the MOL standard for calculation. The approach behind this is explained
below.
Comparing standard EEOI values for each vessel type shows that there are significant
differences in the values depending on the characteristics of the cargo that is subject
to calculation. For example, if you compare a vessel carrying heavy cargo per volume(e.g., a dry bulk carrier) with a vessel carrying relatively light cargo (e.g., a vehicle
carrier), there will naturally be a significant difference in ton-miles between the twovessels. As a result, the EEOI value of vehicle carriers may be several to ten times ormore than that of dry bulk carriers of the same size and same fuel consumption. In
reality, even two vessels with the same level of environmental performance will havean extreme difference in their EEOI evaluation due to the characteristics of the cargo
they carry.
These differences in EEOI values due to characteristics of the cargo cause issues withcalculating the company-wide EEOI value. If we simply divide the total emissions of
all sectors by the total ton-miles (⇒ the "reference method"), a change in the tonmiles of a vessel carrying lighter cargo per volume will cause a bigger change in thecompany-wide EEOI value.

If the reference method is used, companies operating two or more vessel types withsignificantly different EEOI levels can improve their emissions intensity by changing
their business portfolios. Following the above example, if we reduce the ratio of carcarrier business and increase the ratio of dry bulker business, that alone will greatly
improve our EEOI value. However, we believe that this is not a legitimate
representation of the company's decarbonization performance.
As a member of the shipping industry, which itself is a part of society’s infrastructure,
we are committed to our mission of contributing to the development of the worldand sustaining people’s lives. Rather than turning to the approach of reducing theratio of car transportation to reduce our emissions intensity, we believe that it is in
the true public interest to achieve emissions reductions by improving the efficiency of
automobile shipping itself while fulfilling our social responsibility by responding to
the demand for automobile shipping, which is a key business for society, as long asthat demand exists.
In accordance with this approach, we have adopted the "standard method" as ourstandard calculation method in order to appropriately reflect the rate of change inemissions intensity for each business division in the company-wide total value ofemissions intensity.

This is a serious problem for a general shipping company like MOL, which operates
various types of vessels. The EEOI is a widely used metric of business volume in the
shipping industry, but the nature of this metric creates such distortions whenevaluating across different vessel types.

47

Track Record of Environmental Impact Reduction

GHG emissions

FY2019FY2023

Scope1+2+3 (ton)

15,165,242

13,985,723

Scope1 (ton)

11,136,501

10,055,247

Scope2-Location-based (ton)45,116

41,405

Scope2-Market-based (ton)-

3,912,372

12.12

11.25

SOx emissions (thousand tons)

130

27

NOx emissions (thousand tons)

272

215

158,105

146,277

3,273

2,904

255

263

Electricity (MWh)86,92480,067(Electricity derived from renewable energy)(237)(44,685)

GHG emissions intensity(g-CO2e/ton-mile)
Air pollutant
emissions

Energy consumption Total (thousand GJ)
Fuel oil (thousand tons)
Marine Diesel oil (thousand tons)

Remarks

18,104 Started the calculation of market-based from FY2021.

3,983,625

Scope3 (ton)Related information●Sustainability data (link to our website)

Retroactive revision of FY2019 Scope 3 emissions due toemission factor changes.
Standard method（⇒P.47）, retroactive revision of FY2019
GHG emissions intensity due to emission factor changes.
The upper limit of sulfur content ratio in fuel was lowered fromJanuary 2020.（⇒P.46）

Environmental Management System
MOL group has built the environmental management system called “MOL EMS21,” and been struggling for the reduction of environmental burden, not only the appropriate
collection, management, and disclosure of various environmental data. We have been upholding the qualification of ISO14001 since 2003 and working for continuous improvement
activity with using PDCA cycle. Please refer to our website for more details（link）

48

Track Record of Environmental Impact Reduction

Related information●Sustainability data (link to our website)◼ MOL group GHG emissions and GHG emissions intensity results for FY2023 were as follows

GHG Emissions

GHG Emissions Intensity*For the methodology for calculating emissions and

FY2023 MOL group GHG Emissions
Unit: g-CO2e/ton mile

Unit :
Thousand tons

70

■Scope 1-Vessels■Scope 1-Others■Scope 2■Scope 3-Cat.3■Scope 3-Cat.2■Scope 3-Cat.11■Scope 3-Others

495
1160

Scope3
3,912

2187
18

69

Scope218
Scope1
10,055intensity, please refer to the Appendix (⇒P.45 and P.47).

Scope 3–Cat. 3

9986

Emissions from the production of fuel consumed

Scope 3–Cat. 2

Emissions from the building of MOL’s owned vessels

Scope 3–Cat.11

Emissions from fuels sold by the Group

Scope 3–Others

FY2019Total of Cat. 1, 5, 6, and 7

FY2019 (base year)

15.17

million tons
* All of scope 1,2,3

Down 8％FY2023

FY2019 (base year)

million tons

g-CO2e/ton mile

13.99

12.12

Down 7.2％

FY2021

FY2023

11.25

g-CO2e/ton mile

* Retroactive revision of FY2019-2022 GHG emissions intensity due to emission
factor changes.
49

KPI Results
Division

ACTION 01

KPI (Key Performance Indicator)

FY2023

Milestones

Ratio of zero-emission fuel used (%)

0

No. of LNG/methanol-fueled ocean-goingvessels (Already in service)

2
(0)

38
2030：90 vessels(6)

No. of net zero emissions ocean-going vessels

00 2035：130 vessels

Ratio of power from renewable energy
for Scope 2 (%)

ACTION 02

No. of vessels equipped with Wind Challenger

ACTION 03

Fuel efficiency(Energy consumption per ton-mile)

ACTION 04

Amount of removal type carbon credits used (tCO2)

Climate change measure

GHG emissions (thousand tons)

Climate change measure

FY2019Range of consolidation：Scope1+2

GHG emissions intensity (g-CO2e/ton-mile)Standard method (⇒P47)

Climate change measure

Environmental investment (billion yen)

Prevention of air pollution

SOx* emissions intensity (g-SOx/ton-mile)

Efficient utilization ofEnergy & resources

Fuel efficiency(Energy consumption per ton-mile)

0.3

00.12730
11,182

12.12 *4

0.4 *1 2030：5%

56 2030：100%

9 *20.1185 2025：▲5% compared to 2019(▲6.9% compared to 2019)0 *3 2030：2.2 million t-CO2
10,073 2030：▲23% compared to 2019(▲10% compared to 2019)

2035：▲45% compared to 2019 (Medium11.25 to long-term targets)(▲7.2% compared to 2019) Reduce 1.4% per year(compared to 2019, average through 2030)-

658 *50.02230.0235 *6(compared to 2020+13.0%)(No. of FY2020)

0.12732030：25 vessels
2035：80 vessels

FY2023-25 in total：Approximately 650
billion yen
2030：▲14% compared to 2020

0.1185 2025：▲5% compared to 2019(▲10% compared to 2019)*1 Including biodiesel usage that meets the IMO provisional guidance (international certification scheme, emission intensity conditions) published in MEPC80 in July 2023.
*2 Including 1 coal carrier and 6 dry bulk carriers which will be loaded in FY2024, 2 at the end of FY2023.
*3 For details of the carbon credit utilization plan, please refer to the “Progress of Milestones” on the Environmental Vision website.
*4 Retroactive revision of FY2019 GHG emissions intensity due to emission factor changes.
*5 Actual investment on a decision-making basis, of which 259.5 billion yen was actually invested in FY2023.
*6 Due to increase in sulfur content in fuel (average).

50

51