Treatment of Carbon Recycling in G7 Summit CommuniqueThewas established as a document ofachievements on the occasion of the G7 Summit held in Hiroshima, Japan from May 19to 21, 2023. Carbon ecycling is described as follows:

Paragraph 25"(Excerpt)... We acknowledge that Carbon Capture, Utilization and Storage (CCUS)/ carbonrecycling technologies can be an important part of a broad portfolio of decarbonization solutionsto reduce emissions from industrial sources that cannot be avoided otherwise and that the deployment ofcarbon dioxide removal (CDR) processes with robust social and environmental safeguard, have anessential role to play in counterbalancing residual emissions from sectors that are unlikely to achieve fulldecarbonization."

2

Treatment of Carbon Recycling in the G7 Climate Energy EnvironmentMinisterial Meeting CommuniqueThewasestablished as a document of achievements on the occasion of the G7 Climate, EnergyCarbon ecycling is described as follows:Paragraph 68 Carbon Management (Excerpt from CR related parts)"(Excerpt)... We will co-operate to promote development of export/import mechanisms for CO2. Werecognize the need to develop systems or incentives that enhance utilization of CO2 and the value ofCO2 through utilization. Considering the evolving nature of these technologies, we recognize thatCCU/carbon recycling and CCS can be an important part of a broad portfolio of decarbonizationsolutions to achieve net-zero emissions by 2050, and Carbon dioxide Capture,Utilization(CCU)/carbon recycling technologies, including recycled carbon fuels and gas (RCFs) such ase-fuels and e-methane, also can reduce emissions with existing infrastructure from industrial sources thatcannot be avoided otherwise by displacing fossil-derived commodities and by using CO2... (Excerpt)...
We will accelerate international cooperation to promote harmonization of MRV of CDR and exchangesincluding through collaborative workshops among industry, academia, and government onCCU/carbon recycling technologies, such as RCFs

3. The Significance of Carbon Recycling

The Role of Carbon Recycling towards Carbon NeutralityTo achieve the goal of carbon neutrality by 2050, it is necessary to maximize the use of carbon recycling and CCS as carbonmanagement strategies. Sectors where emissions cannot be achieved through electrification, hydrogenation, etc., and CO2emissions are unavoidable, are especially noteworthy, such as power plants, the materials industry, and the oil refiningindustry.
Carbon recycling, which treats and reuses CO2 as a valuable resource, is an important option that serves as a 'key' to realizedecarbonization as well as its industrial and energy policies, alongside renewable energy, nuclear power, hydrogen, andammonia.

II. Technology

Important points for Carbon Recyling TechnologiesIn order to effectively advance R&D in arbon Recycling technologies to addressclimate change and the security of natural resources, the following points need to beconsidered:Affordable CO2 freeydrogen is important for many technologies.

Under the hydrogen and fuel cells strategy roadmap inthe target cost for on-site delivery in 2050 is JPY 20/Nm3.

HydrogenWhile the problem of hydrogen supply remains, (a) R&D for biomass and othertechnologies not dependent on hydrogen should continue, (b) CH4 (methane)should be used in place of hydrogen until the establishment of hydrogen supply.
zero-emission

supply is important for arbon Recycling.

Conversion of a stable substance, CO2, into other useful substances will require alarge amount of energy.

Reducing the costsCO2 capturing technologies including DAC is necessary and willhave a positive feedback on carbon ecycling.

Reference: Summary of Carbon RecyclingTechnologyProducts*1 Current prices of carbon recycling products are based on research by secretariat.
*2 Prices of existing products are reference values based on statistical data and research results.
2-Based Fuel Manufacturing Technology Development' project's research and development & societalimplementation directions (8th Industrial Structure Council GI Project Subcommittee Energy Structure Transformation Area WG,December 23, 2021).
*4 Target value in the 'Green Growth Strategy Through Achieving Carbon Neutrality in 2050' (June 2021).

Price of the ExistingEquivalent product(as of Jan. 2023)

In 2030

From 2040Onwards

Reduction in process costs

Further reductionin process cost

Approx. JPY 180/kg*2(ethylene (domestic sale price)) Reduction in process costs

Further reductionin process cost

Current Status

Challenges

Partially commercialized. Innovativeprocess (light, electricity, utilization)is at R&D stage.

Improvement of conversion efficiencyand reaction rate, improvement indurability of catalyst, etc.

Partially commercialized (e.g., Syngas,etc. produced from coal). Others are atR&D stage.

Improvement in conversion rate/selectivity, etc.

Partially commercialized (e.g.,polycarbonates). Others are at R&Dstage.
[Price example] Price of the existingequivalent products (Polycarbonate)

Reduce the amount of CO2 emissionsfor Polycarbonate.
Approx. JPY 400/kg*2Commercialization of the other(polycarbonate (domestic saleprice))compounds (Improvement ofconversion rate/selectivity, etc.)

Technical development stage (Substance Cost reduction/effective pretreatmentproduction using CO2 and non-edibletechnique, microbial modificationbiomass etc. as raw materials)technology, etc.

Costs: similar to those ofexisting products

Further reductionin process cost

About 1.2 times the costs ofexisting products

Further reduction in cost

Reduction in process costs

Further reduction in costTechnical development/Demonstration stage[Price example] SAF JPY 1,600/L*1

Improvement of productivity, costreduction, effective pretreatmenttechnique, etc.

Approx. JPY 100/L*2 level(bio jet fuels (domestic saleprice))

Technical development stage (Syntheticfuel (e-fuel))[Price Example] Synthetic fuel approx.
JPY 300-700/L*1

Improvement in current processes,system optimization, etc.

Approx. JPY 170/L*2(gasoline (domestic sale price))

Technical development/Demonstration stage

System optimization, scale-up,efficiency improvement, etc.

Reduction in process costs

Costs: similar to those ofexisting products(JPY 40-50/Nm3)*4

Partially commercialized. R&D for varioustechnologies and techniques for costreduction are underway.
[Price Example]order of JPY 100/kg (Road curb block)Road curb blocks, etc., withSeparation of CO2-reactive and CO2JPY 30/kg*2high technological maturityunreactive components,(precast concrete for road curbcosts: similar to those ofpulverization, cost reduction, etc.
blocks (domestic sale price))existing products

For products withexpanded applicationscosts: similar to those ofexisting products

Partially commercialized (chemicalabsorption). Other techniques are at R&DstageReduction in the required energy, etc.
[Price Example] Approx. JPY 4,000-6,000/t-CO2 (Chemical absorption)Technologies have been roughlyestablished (e.g., water electrolysis). R&DCost reduction, etc.
for other techniques and cost reductionare also underway.

JPY 105/Nm3*2(Natural gas (import price))

Costs: similar to those ofexisting products(about JPY 100-150/L)*3

ApproximatelyJPY 1,000-2,000/t-CO2(Refer to the slide oncommon technology (CO2separation and capturetechnology))

JPY 1000/t-CO2JPY 2000/t-CO2(DAC)

JPY 30/Nm3 *4

JPY 20/Nm3 *4(cost for on-site delivery)

. Accelerating Industrialization(1) Inter-Industry Collaboration

15

Types of Industrial Collaboration in Carbon RecyclingIn industrial agglomerations such as complexes, existing infrastructure is well established,and the efficient hydrogen supply necessary for carbon recycling is possible. On the otherhand, CO2 is emitted throughout Japan, and there are technologies that do not requirehydrogen, such as cement and concrete.
The way of industrial collaboration is diverse, but based on the supply amount of CO2, theaccumulation degree of users, and the status of existing infrastructure, industrial collaboration canbe classified as in the following three types:Large-scale ndustrialComplex ypeExistence of CO2 emitters and usersMultiple CR applications are expected.
Efficient infrastructure developmentleveraging scale merits is possible.

Small and Medium ScaleDistributed TypeNeed to aggregate CO2 due to absence oflarge-scale CO2 emission sourcesCR applications differ depending on hydrogenprocurement status. (In inland areas,concrete, cement, food, agriculture, bio, etc.)(Example of consideration inRegion)(Example of Goi-Soga (Chiba) Complex)

On-site ypeAssuming CR technologies such as methanationIt can be realized early from the demonstrationstage, playing a significant role in the initial stageof CR introduction and the demonstration phase.
A consideration of the total energy balance, suchas effective use of waste heat and steam, isnecessary.

(Example of Carbon Recycling Blast Furnace)(Source) NEDO Project "Investigation of Industrial Collaboration inGoi Area, Chiba Prefecture (Yokogawa Electric Corporation)"CR

Carbon Recycling(Source) 9th Methanation Promotion Public-Private Council(Aisin Corporation, Denso Corporation, Toho Gas Co., Ltd.)(Source) 7th Methanation Promotion Public-Private Council (JFESteel Corporation)

16

. Acceleration of Industrialization(2) Initiatives for International Collaboration

18

CCU/Carbon Recycling: initiatives by Japanese CompaniesChinaEU/EuropeCCU technology: Sekisui Chemicaland ArcelorMittalCarbon Credit: Mitsubishi Co. andSouth Pole

E-methanol (sales): Marubeni andMFESE-Methane (F/S): Hitachi Zosen inthe Yulin ETDZ

ASEAN<Malaysia>- E-methane (F/S): SumitomoCo., Tokyo Gas andPetronas.

Middle East<Saudi Arabia>E-methanol (F/S): Mitsui & Co. andSaudi Aramco<Thailand>- E-methane: Nippon SteelEngineering and localcement factories<Indonesia>- CCU technology: ChiyodaCorporation and Pertamina<Singapore>- E-SAF (joint R&D): IHI andthe Institute of Science andTechnology- E-methane (F/S): OsakaGas and a local company.

CanadaLow-carbon concrete:Mitsubishi Co. and CarbonCureCarbon capture andconversion to Potassiumcarbonate: Tokyo Gas andCleanO2AustraliaCarbon Calcium Fixation:Itochu, Taisei Co. and MCiE-methanol (F/S): MitsubishiGas Chemical and CementAustraliaE-methane- Osaka Gas and Santos(detailed studies)- INPEX and CSIRO (F/S)
E-fuel/SAF (F/S): ToyoEngineering and Sojitz

United StatesCCU aggregate for concrete:Mitsubishi Co. and Blue PlanetBio CCU technology:- Mitsui & Co. and LanzaTech(ethanol)- Sekisui Chemical and LanzaTechat Iwate Pref.
- Mitsubishi Heavy Industries hasinvested in Symbita FactoryE-methanol: Mitsui & Co. andCERANIZEE-methane (F/S)- Tokyo Gas, Osaka Gas, TohoGas, Mitsubishi Co.
- JERA- Osaka Gas with bio-deribed CO2E-fuel: Mitsubishi Heavy Industrieshas invested in InfiniumDAC: Tokyo Gas has invested inGlobal ThermostatPeruE-methane (F/S): Osaka Gasand Marubeni

19Challenges to the Environmental Value of Carbon Recycling:(a) Information Disclosure by Private BusinessesThe GHG Protocol requires businesses to report all CO2 emitted during their operations. Among them, the rulefor the disclosure of CO2 emissions throughout the supply chain (Scope 3) demands double or triple counting,which is not a system able to evaluate carbon recycling (emission control) from a whole systemperspective.
Therefore, it is necessary to create a system that can evaluate emission suppression by carbon recycling.

Concept of accounting in GHG Protocol Scope 1, 2, and 3

Scope1Capturecompany

CO2 emitted duringcapture

Scope2

Scope3CO2 emitted duringmanufacturing anduse

Total

CO2 fromManufacturing CO2 emitted during electricity used CO2 emitted during CO2 emitted during in-house electricitycompanymanufacturingrecovery and use usage, capture, manufacturing, and usein-houseCO2 emitted duringUser companyuse

CO2 emitted duringrecovery andmanufacturing20

. Accelerating Industrialization(3) Creating Carriers and Efforts Towardsan Ecosystem

22

ReferenceCountry

Domestic and International Startups in Carbon Recycling

Company / OrganizationNameO.C.O Technology(Start-up)

Clime works(Start-up)

Product /SubstanceLightweightaggregate

DevelopmentStageCountry

Commercialization

DAC (using amine- Commercializationbased solidabsorbents, etc.)*High Cost

Company / OrganizationNameCarbon Cure(Start-up)
Country

Company / OrganizationNameLanza TechCountry

Company / OrganizationNameProduct /SubstanceDevelopmentStage

Bioplastics, etc.

Fundamental

Hiroshima University

Cosmetics, etc.

Fundamental

Gifu University

Urea

Fundamental

Tohoku University

Silicon carbide

Fundamental

Algal Bio(Start-up)

Kanazawa University,RITEDAC(Start-up)

Opus12(Start-up)

NewlightTechnologies(Start-up)

Solidia Technology(Start-up)

Fundamental

Blue Planet(Start-up)

Some universities have initiated efforts to create new carbon recycling organizations,signaling potential new actors in the field.
(From public information)Ibaraki University: Carbon Recycling Energy Research CenterKyushu University: International Institute for Carbon-Neutral Energy ResearchKyoto University: Material Process Innovation Project based on Carbon RecyclingShizuoka University: Institute for Carbon Recycle TechnologyTokyo Institute of Technology: Mitsubishi Electric Energy & Carbon ManagementCollaborative Research BaseDoushisha University: Doushisha University Education and Research Platform forCarbon RecyclingHiroshima University: Carbon Recycling Implementation Project Research Centeretc.

Country

Company / OrganizationName

HIF(Start-up)

Product /Substance

Cement rawmaterialProduct /Substance

DevelopmentStage

CommercializationDevelopmentStage

EthanolDemonstration

Methane, Ethane,Ethanol

Demonstration

Polymers (usingbiocatalysts)

Commercialization

CO2 absorbingconcrete

Commercialization

Lightweightaggregate

Commercialization

Product /Substance

DevelopmentStage

Synthetic fuels(e-fuel)Demonstration

24

Support for advanced CCS business with modelsTo establish a business model that can be deployed horizontally for the spread andexpansion of CCS business in the future, advanced CCS businesses led by businessoperators will be selected and intensively supported by the national government, aiming atstarting the business by 2030.
Specifically, support will begin for 3 to 5 projects that have different combinations of CO2capture sources, transportation methods, and CO2 storage areas, aiming at establishingvarious CCS business models, as well as securing an annual storage capacity of 6 to 12million tons by 2030.
Note) Shall be set based on the goals of business operators planning to enter CCS. The UK also targets annualstorage capacity of 10 million tons by 2030.

As a model, it shall be a project that works on large-scale business and overwhelming costreduction by clustering CO2 capture sources and developing CO2 storage areas into a hub.
Examples of expected CO2 capture sources, transportation methods, and CO 2 storage areasCO2 capture sources

Transportation methods

CO2 storage areas

Thermal power plantsSteel millsChemical plantsCement plantsPaper mills

PipelinesShips

Terrestrial undergroundUnder the sea (coastal area)Under the sea (offshore)

Hydrogen manufacturingplants, etc.

26

Storage areas

CO2 Sources

Transportation methods

Types of storage site

Tomakomai Area CCSJAPEX, Idemitsu Kosan, Hokkaido Electric power

Oil refinery, electric powerplant

Pipeline

Onshore depleted gas fieldsand/or Near shore

Tohoku region west coast CCSITOCHU Corp., Nippon Steel, Taiheiyo Cement,Mitsubishi Heavy Industries, ITOCHU Oil Exploration,INPEX, Taisei Corp.

Steel plant, Cement plant

Ship, Pipeline

Near shore

East Niigata Aria CCSJAPEX, Tohoku electric power, Mitsubishi Gas ChemicalCompany, Hokuetsu Co, Nomura Research Institute.

Chemical plant, Paper plant,Pipelineelectric power plant

Onshore depleted gas fieldsNear Shore

Metropolitan Aria CCSINPEX, Nippon Steel, Kanto Natural Gas Development

Steel plant, others

Pipeline

Near Shore

Northern to Western Offshore CCSENEOS JX Nippon Oil & Gas Exploration

Oil refinery, electric powerplant

Ship, Pipeline

Offshore

Offshore Malay CCSMitsui & Co.

Oil refinery, Chemical plant,others

Ship, Pipeline

Oversea project (Malaysia)

OceaniaMitsubishi Corp., Nippon Steel, ExxonMobil

Steel plant, others

Ship, Pipeline

Oversea project

J-Power

Oceania