Calculation basis for analysis of fiscal impact of risks and opportunities on business activities (relevant to p. 32 of ESG Report 2023)■ 4.0°C scenario▼ Positive fiscal impacts
No.
Item

Opportuni
ty 1

No.

Increased profit fromnew business (market
opportunity)* The long-term business scale is difficult to predict and is therefore assumed to be equal to the medium-term business scale.

Short term
The Daiseki Group’s consolidated operating profit in FY2023 was ¥12,711 million, of which approximately ¥11,000 million was
generated by our industrial waste treatment and recycling operations.
In FY2019, Daiseki announced Vision 2030, our long-term
management vision for FY2031. We have been strengthening ourenvironment-related businesses since, with a focus on carbon
neutrality and the circular economy. Our consolidated operating profit
in FY2018, the year before we launched Vision 2030, was ¥8,777
million, increasing to ¥12,711 million in FY2023, giving an averageannual growth rate of 7.6% over this five-year period. If we continue
to grow at this rate until FY2031, our consolidated operating profit
will be ¥23,000 million in that year. In Vision 2030, we set out ourplan to increase revenues and profit through new businesses, M&A,
and other activities, with a target of achieving a consolidated
5,000
operating profit of ¥25,000 million by FY2031. We plan to generate ¥20,000 million of this consolidated operating profit from our existing
industrial waste treatment and recycling operations. We also plan toestablish new businesses that will contribute to carbon neutrality andthe circular economy and generate an operating profit of ¥5,000
million by FY2031. Daiseki Eco. Solution provides a record ofsuccess in this area: starting out as a new internal venture within
Daiseki Co., Ltd. in 1996, it has grown, in the approximately 20 years
since its founding, into a Group company now generating an
operating profit of ¥2,000 million. We are working to establish three
new businesses of a similar scale to Daiseki Eco. Solution. In the
short term, we can expect the demand for carbon neutrality and acircular economy to be approximately the same in either a 1.5°C or
4.0°C scenario. On this basis, we estimate that the fiscal impact of
this opportunity will be a contribution of ¥5,000 million to increases
million yen in consolidated operating profit from FY2023 to FY2031.

Item

Increased profit fromexisting industrial waste
Opportuni
treatment and recyclingty 2
operations(market opportunity)

Item

10,0009,000

The Daiseki Group’s consolidated operating profit in FY2023 was ¥12,711 million, of which approximately ¥11,000 million was
generated by our industrial waste treatment and recycling operations.
In FY2019, Daiseki announced Vision 2030, our long-term
management vision for FY2031. We have been strengthening ourenvironment-related businesses since, with a focus on carbon
neutrality and the circular economy. Our consolidated operating profit
in FY2018, the year before we launched Vision 2030, was ¥8,777
million, increasing to ¥12,711 million in FY2023, giving an averageannual growth rate of 7.6% over this five-year period. If we continue
to grow at this rate until FY2031, our consolidated operating profit
will be ¥23,000 million in that year. In Vision 2030, we set out ourplan to increase revenues and profit through new businesses, M&A,
and other activities, with a target of achieving a consolidated
operating profit of ¥25,000 million by FY2031. We can expect thedemand for industrial waste treatment and recycling to beapproximately the same in either a 1.5°C or 4.0°C scenario, and planto generate ¥20,000 million of the above consolidated operating profit
target from our existing industrial waste treatment and recycling
operations. We estimate that the short-term fiscal impacts of thisopportunity in a 4.0°C scenario (its contribution to increases in
consolidated operating profit from FY2023 to FY2031) will be ¥9,000 million: the ¥20,000 million projection for FY2031 minus the ¥11,000 million contributed in FY2023.

In the medium term, we have hypothesized that a 4.0°C scenario
would see a 2.3% growth in consolidated operating profit by FY2051.
In FY2019, Daiseki announced Vision 2030, our long-term
management vision for FY2031. We have been strengthening ourenvironment-related businesses since, with a focus on carbon
neutrality and the circular economy. In the ten years prior to thelaunch of Vision 2030, from FY2007 to FY2017, our consolidated
operating profit grew at an average annual growth rate of 2.3%, whilein the five years since its launch, from FY2018 to FY2023, this rate
has been 7.6%. In a 4.0°C scenario, we hypothesize that growth in themedium term will remain at pre-launch levels. This would see ourconsolidated operating profit grow to approximately ¥36,000 million
by FY2051. Of this, we would plan to generate ¥26,000 million fromour existing industrial waste treatment and recycling operations and ¥10,000 million from new businesses. We estimate that the mediumterm fiscal impact of this opportunity in a 4.0°C scenario (itscontribution to increases in consolidated operating profit fromFY2023 to FY2051) would be ¥10,000 million, taking into accountthe fact that we recorded no profit from new businesses in FY2023.

million yen

Short term

million yen

No.

Medium term

10,000Medium term

15,000In the long term, we have hypothesized that a 4.0°C scenario would
see a 2.3% growth in consolidated operating profit by FY2051. In
FY2019, Daiseki announced Vision 2030, our long-term management
vision for FY2031. We have been strengthening our environmentrelated businesses since, with a focus on carbon neutrality and thecircular economy. In the ten years prior to the launch of Vision 2030,
from FY2007 to FY2017, our consolidated operating profit grew at
an average annual growth rate of 2.3%, while in the five years since
its launch, from FY2018 to FY2023, this rate has been 7.6%. In a
4.0°C scenario, we hypothesize that growth in the long term willremain at pre-launch levels. This would see our consolidated
operating profit grow to approximately ¥36,000 million by FY2051.
Of this, we would plan to generate ¥26,000 million from our existing
industrial waste treatment and recycling operations and ¥10,000
million from new businesses. We estimate that the long-term fiscal
impact of this opportunity in a 4.0°C scenario (its contribution toincreases in consolidated operating profit from FY2023 to FY2051)
would be ¥10,000 million, taking into account the fact that werecorded no profit from new businesses in FY2023.

million yen

In the medium term, we have hypothesized that a 4.0°C scenario
would see a 2.3% growth in consolidated operating profit by FY2051.
In FY2019, Daiseki announced Vision 2030, our long-term
management vision for FY2031. We have been strengthening ourenvironment-related businesses since, with a focus on carbon
neutrality and the circular economy. In the ten years prior to thelaunch of Vision 2030, from FY2007 to FY2017, our consolidated
operating profit grew at an average annual growth rate of 2.3%, whilein the five years since its launch, from FY2018 to FY2023, this rate
has been 7.6%. In a 4.0°C scenario, we hypothesize that growth in themedium term will remain at pre-launch levels. This would see ourconsolidated operating profit grow to approximately ¥36,000 million
by FY2051. Of this, we would plan to generate ¥26,000 million fromour existing industrial waste treatment and recycling operations. We
estimate that the medium-term fiscal impacts of this opportunity in a
4.0°C scenario (its contribution to increases in consolidated operating
profit from FY2023 to FY2051) will be ¥15,000 million: the ¥26,000
million projection for FY2051 minus the ¥11,000 million contributed
in FY2023.

million yen

Short termLong termLong term

15,000In the long term, we have hypothesized that a 4.0°C scenario would
see a 2.3% growth in consolidated operating profit by FY2051. In
FY2019, Daiseki announced Vision 2030, our long-term management
vision for FY2031. We have been strengthening our environmentrelated businesses since, with a focus on carbon neutrality and thecircular economy. In the ten years prior to the launch of Vision 2030,
from FY2007 to FY2017, our consolidated operating profit grew at
an average annual growth rate of 2.3%, while in the five years since
its launch, from FY2018 to FY2023, this rate has been 7.6%. In a
4.0°C scenario, we hypothesize that growth in the long term willremain at pre-launch levels. This would see our consolidated
operating profit grow to approximately ¥36,000 million by FY2051.
Of this, we would plan to generate ¥26,000 million from our existing
industrial waste treatment and recycling operations. We estimate thatthe long-term fiscal impacts of this opportunity in a 4.0°C scenario(its contribution to increases in consolidated operating profit fromFY2023 to FY2051) will be ¥15,000 million: the ¥26,000 million
projection for FY2051 minus the ¥11,000 million contributed in
FY2023.

million yen

Medium termLong termOpportuni
ty 3

Increased profit fromour recycled fuelsbusiness(market opportunity)

450

million yen

As greenhouse gas emissions regulations become more stringent,
regulations on fossil fuel use are also being tightened. Based on
predictions of rising demand for recycled fuels over the short,medium, and long term in a 4.0°C scenario, we will continue toexpand our operations in this area. Daiseki’s FY2023 operating profit
was ¥9,639 million. Approximately 10% of this, ¥900 million yen,came from our recycled fuels business. In terms of the short-term
fiscal impacts of this opportunity in a 4.0°C scenario, we hypothesizethat operating profit from these operations will increase by 50% (¥450 million).

1,125

million yen

In terms of the medium-term fiscal impacts of this opportunity in a
4.0°C scenario, we hypothesize that a 50％ increase in operating
profit from these operations in the short term (as compared to
FY2023) will be followed by a further 50％ increase (an anticipatedincrease of ¥1,125 million in total).

1,125

million yen

In terms of long-term fiscal impacts of this opportunity in a 4.0°C
scenario, we hypothesize that a 50％ increase in operating profit fromthese operations in the short term (as compared to FY2023) will befollowed by a further 50％ increase (an anticipated increase of ¥1,125
million in total).

▼ Negative fiscal impacts
No.
Item

Short term

Medium term

The GX League’s emissions trading system (GX-ETS) will launch in
FY2024. Daiseki is not currently expected to make emissions-based
payments under the GX-ETS due to our low emissions. However, wehave estimated the potential fiscal impact of this risk by taking into
account the possibility that we may reach the threshold for the systemin future and estimating the sum we would have to pay. In FY2023,
the Daiseki Group’s Scope 1 emissions were 27,951 tons of CO2 andRisk 1

Increased energy costs
due to carbon pricing
systems (regulatory risk)

211

our Scope 2 emissions were 9,990 tons of CO2, giving a
combined total of 37,941 tons of CO2. The Japanese
government has declared its goal to reduce emissions by 46%
by FY2031 as compared to FY2014 levels. If Daiseki wererequired to reduce our emissions by 46% by FY2031 ascompared to FY2023 levels, this would correspond to a
reduction of 17,453 tons of CO2. We have made provisional
calculations on the basis of carbon pricing being applied to thisamount. We have estimated that the price of carbon per ton will
increase to 90 US$ by FY2031 in a 4.0°C scenario, based on
predictions put forward by the International Energy Agency(IEA) in its World Energy Outlook (WEO) 2022. We used an
exchange rate of 1 US$ to ¥134.1, based on FY2023 rates. We
thereby estimated a fiscal impact of ¥211 million: 17,453 tonsof CO2 × 90 US$ × ¥134.1.

million yen

No.

Risk 2

Item

Reduced profit due tohalt in operations caused
by natural disaster (acutephysical risk)

The Japanese government has declared its goal to reduce emissions tozero by FY2051. If we hypothesize that Daiseki’s business will
double in size over the medium term, emissions to be reduced overthe medium term will total 75,882 tons of CO2 (double our

1,150

Short term

280

million yen

emissions in FY2023). We have made provisional calculations
on the basis of carbon pricing being applied to this amount. We
have estimated that the price of carbon per ton will increase to
113 US$ by FY2051 in a 4.0°C scenario, based on predictions
put forward by the IEA in its WEO 2022. We used an exchange
rate of 1 US$ to ¥134.1, based on FY2023 rates. We thereby
estimated a medium-term fiscal impact of ¥1,150 million:
75,882 tons of CO2 × 113 US$ × ¥134.1.

million yen

There are risks of temporary reductions in sales revenue and theaccrual of repair costs for equipment due to halts in factory
operations, disruption of logistics networks, and other factors due tostorms. The costs from the FY2020 disaster at Daiseki’s Chiba
Works amounted to approximately ¥40 million. Disasters in the 1.5°C
scenario and the 4.0°C scenario over the short term are thought to be
similar. We have estimated potential damages on the basis of theproperty value of our Chiba and other Works. The estimated value of
Daiseki’s Chiba Works as of the end of February 2023 (not including
associated land) is ¥223 million. However, the average property valueof a Daiseki Works (not including associated land), averaged acrossall of Daiseki’s six Works, is ¥1,588 million, equivalent to seventimes the value of our Chiba Works. To estimate the potential shortterm fiscal impact of this risk, we have therefore taken into accountthe possibility of suffering damages amounting to seven times thelevel incurred at the time of the disaster at our Chiba Works, for an
estimate of ¥280 million.

Long term

The Japanese government has declared its goal to reduce emissions tozero by FY2051. If we hypothesize that Daiseki’s business will
double in size over the long term, emissions to be reduced over the
medium term will total 75,882 tons of CO2 (double our emissions

1,150

million yen

Medium term

1,269

million yen

in FY2023). We have made provisional calculations on thebasis of carbon pricing being applied to this amount. We haveestimated that the price of carbon per ton will increase to 113
US$ by FY2051 in a 4.0°C scenario, based on predictions put
forward by the IEA in its WEO 2022. We used an exchange
rate of 1 US$ to ¥134.1, based on FY2023 rates. We thereby
estimated a long-term fiscal impact of ¥1,150 million: 75,882
tons of CO2 × 113 US$ × ¥134.1.

To estimate worst-case medium-term impacts in a 4.0°C scenario, we
considered the possibility that a disaster could occur at Daiseki
Kyushu Works, our highest-valued Works. If we hypothesize that
Daiseki’s business doubles in size over this period and a disasteroccurs at our Kyushu Works (with a property value of ¥3,536 million,
16 times that of our Chiba Works), estimated damages amount to ¥1,269 million (¥40 million × 2 × ¥3,536 million ÷ ¥223 million).

Long term

2,538

million yen

Over the long term in a 4.0°C scenario, we assume that physical risk
will increase as weather events become more severe, and therefore
hypothesize that fiscal impacts will double as compared to themedium term, for an estimated impact of ¥2,538 million.

■ 1.5°C scenario▼ Positive fiscal impacts
No.
Item

Opportuni
ty 1

No.

Increased profit fromnew business (market
opportunity)* The long-term business scale is difficult to predict and is therefore assumed to be equal to the medium-term business scale.

Short term
The Daiseki Group’s consolidated operating profit in FY2023 was ¥12,711 million, of which approximately ¥11,000 million was
generated by our industrial waste treatment and recycling operations.
In FY2019, Daiseki announced Vision 2030, our long-term
management vision for FY2031. We have been strengthening ourenvironment-related businesses since, with a focus on carbon
neutrality and the circular economy. Our consolidated operating profit
in FY2018, the year before we launched Vision 2030, was ¥8,777
million, increasing to ¥12,711 million in FY2023, giving an averageannual growth rate of 7.6% over this five-year period. If we continue
to grow at this rate until FY2031, our consolidated operating profit
will be ¥23,000 million in that year. In Vision 2030, we set out ourplan to increase revenues and profit through new businesses, M&A,
and other activities, with a target of achieving a consolidated
5,000
operating profit of ¥25,000 million by FY2031. We plan to generate ¥20,000 million of this consolidated operating profit from our existing
industrial waste treatment and recycling operations. We also plan toestablish new businesses that will contribute to carbon neutrality andthe circular economy and generate an operating profit of ¥5,000
million by FY2031. Daiseki Eco. Solution provides a record ofsuccess in this area: starting out as a new internal venture within
Daiseki Co. Ltd. in 1996, it has grown, in the approximately 20 years
since its founding, into a Group company now generating an
operating profit of ¥2,000 million. We are working to establish three
new businesses of a similar scale to Daiseki Eco. Solution. In the
short term, we can expect the demand for carbon neutrality and acircular economy to be approximately the same in either a 1.5°C or
4.0°C scenario. On this basis, we estimate that the fiscal impact of
this opportunity will be a contribution of ¥5,000 million to increases
million yen in consolidated operating profit from FY2023 to FY2031.

Item

Increased profit fromexisting industrial waste
Opportuni
treatment and recyclingty 2
operations(market opportunity)

Item

20,0009,000

The Daiseki Group’s consolidated operating profit in FY2023 was ¥12,711 million, of which approximately ¥11,000 million was
generated by our industrial waste treatment and recycling operations.
In FY2019, Daiseki announced Vision 2030, our long-term
management vision for FY2031. We have been strengthening ourenvironment-related businesses since, with a focus on carbon
neutrality and the circular economy. Our consolidated operating profit
in FY2018, the year before we launched Vision 2030, was ¥8,777
million, increasing to ¥12,711 million in FY2023, giving an averageannual growth rate of 7.6% over this five-year period. If we continue
to grow at this rate until FY2031, our consolidated operating profit
will be ¥23,000 million in that year. In Vision 2030, we set out ourplan to increase revenues and profit through new businesses, M&A,
and other activities, with a target of achieving a consolidated
operating profit of ¥25,000 million by FY2031. We can expect thedemand for industrial waste treatment and recycling to beapproximately the same in either a 1.5°C or 4.0°C scenario, and planto generate ¥20,000 million of the above consolidated operating profit
target from our existing industrial waste treatment and recycling
operations. We estimate that the short-term fiscal impacts of thisopportunity in a 1.5°C scenario (its contribution to increases in
consolidated operating profit from FY2023 to FY2031) will be ¥9,000 million: the ¥20,000 million projection for FY2031 minus the ¥11,000 million contributed in FY2023.

Over the medium term in a 1.5°C scenario, we can expect to see highgrowth rates due to increasing demand for carbon neutrality and acircular economy. In FY2019, Daiseki announced Vision 2030, ourlong-term management vision for FY2031. We have beenstrengthening our environment-related businesses since, with a focus
on carbon neutrality and the circular economy. In the ten years prior
to the launch of Vision 2030, from FY2007 to FY2017, ourconsolidated operating profit grew at an average annual growth rateof 2.3%, while in the five years since its launch, from FY2018 to
FY2023, this rate has been 7.6%. This would see our consolidated
operating profit grow to approximately ¥60,000 million by FY2051.
Of this, we would plan to generate ¥40,000 million from our existing
industrial waste treatment and recycling operations and ¥20,000
million from new businesses. We estimate that the medium-term
fiscal impact of this opportunity in a 1.5°C scenario (its contribution
to increases in consolidated operating profit from FY2023 toFY2051) would be ¥20,000 million, taking into account the fact that
we recorded no profit from new businesses in FY2023.

million yen

Short term

million yen

No.

Medium term

20,000Medium term

29,000Over the long term in a 1.5°C scenario, we can expect to see highgrowth rates due to increasing demand for carbon neutrality and acircular economy. In FY2019, Daiseki announced Vision 2030, ourlong-term management vision for FY2031. We have beenstrengthening our environment-related businesses since, with a focus
on carbon neutrality and the circular economy. In the ten years prior
to the launch of Vision 2030, from FY2007 to FY2017, ourconsolidated operating profit grew at an average annual growth rateof 2.3%, while in the five years since its launch, from FY2018 to
FY2023, this rate has been 7.6%. This would see our consolidated
operating profit grow to approximately ¥60,000 million by FY2051.
Of this, we would plan to generate ¥40,000 million from our existing
industrial waste treatment and recycling operations and ¥20,000
million from new businesses. We estimate that the long-term fiscal
impact of this opportunity in a 1.5°C scenario (its contribution toincreases in consolidated operating profit from FY2023 to FY2051)
would be ¥20,000 million, taking into account the fact that werecorded no profit from new businesses in FY2023.

million yen

Over the medium term in a 1.5°C scenario, we can expect to see highgrowth rates due to increasing demand for Daiseki’s industrial waste
treatment and recycling operations, which can reduce emissions. In
FY2019, Daiseki announced Vision 2030, our long-term management
vision for FY2031. We have been strengthening our environmentrelated businesses since, with a focus on carbon neutrality and thecircular economy. In the ten years prior to the launch of Vision 2030,
from FY2007 to FY2017, our consolidated operating profit grew at
an average annual growth rate of 2.3%, while in the five years since
its launch, from FY2018 to FY2023, this rate has been 7.6%. Taking
an average of these two rates, we can hypothesize a growth rate inthis area of 5.0% in a 1.5°C scenario. This would see ourconsolidated operating profit grow to approximately ¥60,000 million
by FY2051. Of this, we would plan to generate ¥40,000 million fromour existing industrial waste treatment and recycling operations. We
estimate that the medium-term fiscal impacts of this opportunity in a
1.5°C scenario (its contribution to increases in consolidated operating
profit from FY2023 to FY2031) will be ¥29,000 million: the ¥40,000
million projection for FY2051 minus the ¥11,000 million contributed
in FY2023.

million yen

Short termLong termLong term

29,000Over the long term in a 1.5°C scenario, we can expect to see highgrowth rates due to increasing demand for Daiseki’s industrial waste
treatment and recycling operations, which can reduce emissions. In
FY2019, Daiseki announced Vision 2030, our long-term management
vision for FY2031. We have been strengthening our environmentrelated businesses since, with a focus on carbon neutrality and thecircular economy. In the ten years prior to the launch of Vision 2030,
from FY2007 to FY2017, our consolidated operating profit grew at
an average annual growth rate of 2.3%, while in the five years since
its launch, from FY2018 to FY2023, this rate has been 7.6%. Taking
an average of these two rates, we can hypothesize a growth rate inthis area of 5.0% in a 1.5°C scenario. This would see ourconsolidated operating profit grow to approximately ¥60,000 million
by FY2051. Of this, we would plan to generate ¥40,000 million fromour existing industrial waste treatment and recycling operations. We
estimate that the long-term fiscal impacts of this opportunity in a 1.5°
C scenario (its contribution to increases in consolidated operating
profit from FY2023 to FY2051) will be ¥29,000 million: the ¥40,000
million projection for FY2051 minus the ¥11,000 million contributed
in FY2023.

million yen

Medium termLong termOpportuni
ty 3

Increased profit fromour recycled fuelsbusiness(market opportunity)

270

million yen

As greenhouse gas emissions regulations become more stringent,
regulations on fossil fuel use are also being tightened. In a 1.5°C
scenario, recycled fuel alternatives to fossil fuels will also be subject
to regulation, but we hypothesize that there will be a transition phasein which demand for fossil fuels is maintained in the short term,
before disappearing over the medium to long term. In the short term,
Daiseki will continue our recycled fuels business while considering ashift toward other businesses once the transition period is over, a shift
we will make from the medium term onward. Daiseki’s FY2023
operating profit was ¥9,639 million. Approximately 10% of this, ¥900
million yen, came from our recycled fuels business. In terms of theshort-term fiscal impacts of this opportunity in a 1.5°C scenario, wehypothesize that operating profit from these operations will increaseby 30% (¥270 million).

0

million yen

In the medium term in a 1.5°C scenario, we hypothesize that ourrecycled fuels business will be discontinued, resulting in no increasein operating profit in this area. The fiscal impact of this opportunity istherefore zero.

0

million yen

In the long term in a 1.5°C scenario, we hypothesize that our recycled
fuels business will be discontinued, resulting in no increase inoperating profit in this area. The fiscal impact of this opportunity istherefore zero.

▼ Negative fiscal impacts
No.
Item

Short term

Medium term

The GX League’s emissions trading system (GX-ETS) will launch in
FY2024. Daiseki is not currently expected to make emissions-based
payments under the GX-ETS due to our low emissions. However, wehave estimated the potential fiscal impact of this risk by taking into
account the possibility that we may reach the threshold for the systemin future and estimating the sum we would have to pay. In FY2023,
the Daiseki Group’s Scope 1 emissions were 27,951 tons of CO2 andRisk 1

Increased energy costs
due to carbon pricing
systems (regulatory risk)

328

our Scope 2 emissions were 9,990 tons of CO2, giving a
combined total of 37,941 tons of CO2. The Japanese
government has declared its goal to reduce emissions by 46%
by FY2031 as compared to FY2014 levels. If Daiseki wererequired to reduce our emissions by 46% by FY2031 ascompared to FY2023 levels, this would correspond to a
reduction of 17,453 tons of CO2. We have made provisional
calculations on the basis of carbon pricing being applied to thisamount. We have estimated that the price of carbon per ton will
increase to 140 US$ by FY2031 in a 1.5°C scenario, based on
predictions put forward by the IEA in its WEO 2022. We used
an exchange rate of 1 US$ to ¥134.1, based on FY2023 rates.
We thereby estimated a short-term fiscal impact of ¥328
million: 17,453 tons of CO2 × 140 US$ × ¥134.1.

million yen

No.

Risk 2

Item

Reduced profit due tohalt in operations caused
by natural disaster (acutephysical risk)

Risk 3280

Item
Reduced profit fromsales of recycled fuels(market risk)

2,544

Short term

million yen

No.

The Japanese government has declared its goal to reduce emissions tozero by FY2051. If we hypothesize that Daiseki’s business will
double in size over the medium term, emissions to be reduced overthe medium term will total 75,882 tons of CO2 (double ourmillion yen

2,544

560

We hypothesize that our business will double in size as compared toits short-term scope over the medium term in a 1.5°C scenario,
accompanied by a doubling in potential damages for an estimatedfiscal impact of ¥560 million.

Long term

560

million yen

We hypothesize that our business will double in size as compared toits short-term scope over the long term in a 1.5°C scenario,
accompanied by a doubling in potential damages for an estimatedfiscal impact of ¥560 million.

million yen

Medium term
900

FY2023). We have made provisional calculations on the basisof carbon pricing being applied to this amount. We haveestimated that the price of carbon per ton will increase to 250
US$ by FY2051 in a 1.5°C scenario, based on predictions put
forward by the IEA in its WEO 2022. We used an exchange
rate of 1 US$ to ¥134.1, based on FY2023 rates. We thereby
estimated a long-term fiscal impact of ¥2,544 million: 75,882
tons of CO2 × 250 US$ × ¥134.1.

million yen

million yen

The demand for recycled fuels is predicted to be maintained over the
short term in the 1.5°C scenario as well, and the fiscal impact istherefore expected to be zero.

The Japanese government has declared its goal to reduce emissions tozero by FY2051. If we hypothesize that Daiseki’s business will
double in size over the long term, emissions to be reduced over thelong term will total 75,882 tons of CO2 (double our emissions in

Medium term

Short term0emissions in FY2023). We have made provisional calculations
on the basis of carbon pricing being applied to this amount. We
have estimated that the price of carbon per ton will increase to
250 US$ by FY2051 in a 1.5°C scenario, based on predictions
put forward by the IEA in its WEO 2022. We used an exchange
rate of 1 US$ to ¥134.1, based on FY2023 rates. We thereby
estimated a medium-term fiscal impact of ¥2,544 million:
75,882 tons of CO2 × 250 US$ × ¥134.1.

million yen

There are risks of temporary reductions in sales revenue and theaccrual of repair costs for equipment due to halts in factory
operations, disruption of logistics networks, and other factors due tostorms. The costs from the FY2020 disaster at Daiseki’s Chiba
Works amounted to approximately ¥40 million. Disasters in the 1.5°C
scenario and the 4.0°C scenario over the short term are thought to be
similar. We have estimated potential damages on the basis of theproperty value of our Chiba and other Works. The estimated value of
Daiseki’s Chiba Works as of the end of February 2023 (not including
associated land) is ¥223 million. However, the average property valueof a Daiseki Works (not including associated land), averaged acrossall of Daiseki’s six Works, is ¥1,588 million, equivalent to seventimes the value of our Chiba Works. To estimate the potential shortterm fiscal impact of this risk, we have therefore taken into accountthe possibility of suffering damages amounting to seven times thelevel incurred at the time of the disaster at our Chiba Works, for an
estimate of ¥280 million.

Long term

In a 1.5°C scenario, we predict that demand for recycled fuels will
disappear over the medium term onward, and therefore estimate afiscal impact of ¥900 million in lost operating profit (the operating
profit generated by our recycled fuels business in FY2023).

Long term
900
million yen

In a 1.5°C scenario, we predict that demand for recycled fuels will
disappear over the medium term onward, and therefore estimate afiscal impact of ¥900 million in lost operating profit (the operating
profit generated by our recycled fuels business in FY2023).