NEWSLETTER

November 4, 2021
Kawasaki Kisen Kaisha, Ltd.
The Challenge of Achieving Net-Zero GHG Emissions～Revision of 2050 Targets for “K” LINE Environmental Vision 2050～

Kawasaki Kisen Kaisha, Ltd. (“K” LINE) has revised our environmental target in our longterm environmental guideline “K” LINE Environmental Vision 2050 -Blue Seas for theFuture-, which we had released the revised version in last June, in order to strengthen theinitiatives toward global climate change countermeasures, and has set our new target for2050 as “The Challenge of Achieving Net -Zero GHG Emissions”.
Strengthening global climate change countermeasures has become an urgent issue, andthe movement to achieve virtually zero GHG emissions in 2050 is accelerating in various
governments and in each industry. Under such circumstances, “K” LINE Group will also
take on the challenge of the higher goal of "2050 GHG emission net zero".
We will continue steadily moving forward, as we have been doing, with the action planfor 2030 that is set out in the revised version of the “K” LINE Environmental Vision 2050.
As an integrated logistics company, the “K” LINE Group is working to realize sustainable
society and increase corporate value, and reduce its environmental impact based on its
corporate philosophy of contributing to society so that people live well and prosperously.
Please refer to this link for Revision of 2050 Targets for “K” LINE Environmental Vision 2050.
https://www.kline.co.jp/en/csr/environment/management.html

KAWASAKI KISEN KAISHA, LTD.
サステナビリティ推進・ＩＲ・広報グループ

Corporate Sustainability, IR & Communication GroupBlue Seas for the Future
Navigating for Sustainability, Leading to a Bright Future

The Challenge of Achieving Net-Zero GHG Emissions
Environmental Vision: Revision of 2050 Targets

November 4, 2021

Revision of 2050 Targets for Environmental Vision
Under our corporate principle of helping enrich the lives of people as an integrated logistics company, we aretaking on the mission of “beautiful blue seas for the future” and engaging in environmental efforts. In June 2020,
we announced a revised version of the “K” LINE Environmental Vision 2050, which set decarbonization andaiming for zero environmental impact as the two main factors for our targets, and are advancing initiatives.

As 2030 interim milestones, we have adopted the target of improving CO2 emission efficiency by 50%
compared to 2008, exceeding the 40% target set by the International Maritime Organization, a specialized
agency of the United Nations, have already introduced LNG-fueled carriers, and are also working to introduce
various energy-efficiency technologies, such as wind power propulsion (Seawing).
We will continue steadily moving forward, as we have been doing, with the action plan for 2030 that is set out
in the revised version of the “K” LINE Environmental Vision 2050. We initially set our 2050 target as reducing
GHG emissions by 50%, the same as the IMO. However, as we see that global climate change countermeasuresneed to be addressed by the international society as a whole, we are taking on the challenge of raising our target
even further to net-zero GHG emissions by 2050.
In the second half of the 2020s, we aim to introduce zero-emission vessels powered by new fuels, and will not

only reinforce initiatives for reducing our in-house GHG emissions but also actively support projects aimed at adecarbonized society. These initiatives include support vessels for projects related to the renewable energy field,
such as offshore wind power, transportation of new energy sources, such as hydrogen and ammonia, and carbon
capture and storage (CCS) transportation. I believe that supporting and promoting decarbonization of society,such as the concepts mentioned above, is a major opportunity to open up new domains for the shipping business.
The "K” LINE Group will put its full effort into the decarbonization of the Company and society with the aimof achieving a sustainable society and enhance corporate value.
President & CEO1

New Challenges for 2050
We will steadily promote an action plan for achieving theinterim milestones for 2030 that have been set out in ourEnvironmental Vision.
We will take on the new challenge of achieving net-zero
GHG emissions as a target for 2050.

Minimize “K” LINE impact on
the sea and air“K” LINE decarbonization⚫ Zero oil spills⚫ Aim for zero environmental impact

Take on thechallenge ofnet-zero GHG
emissionsSupport the environmental
activities of society“K” LINE decarbonization⚫ Support theenvironmental activities⚫ Be the industry leaderin ecosystem protection

Cut GHG emissions
by 50%(improve CO2 emissions
by 70% over 2008)

Support thedecarbonization of society

Reduce “K” LINE impact on
the sea and air
Reduce the shipping
operation’s impact on
the sea and air,including zerooil spills

Be the transporterand supplier of
new energy“K” LINE low-carbonization

Support the environmental
activities of society
Increase environmental
dialogue andactivities

InterimMilestones

Improve CO2emission
efficiency by 50%

Support developmentof a low-carbon society
Transport and supply
new energy fora low-carbon society(compared to 2008)

We will aim to

help enrich the lives of people
by also promoting the support ofdecarbonization of society.
2Aim for Net-Zero GHG Emissions
by 2050
In the second half of the 2020s, we aim to introduce zeroemission vessels powered by new fuels, and will not only
reinforce initiatives for reducing our in-house GHG
emissions but also actively work towards a decarbonizedsociety. These initiatives include support for projects
related to the renewable energy field, such as offshore
wind power, transportation of new energy sources, andCO2 transportation.
Supporting and promoting decarbonization of society,such as the concepts mentioned above, is a major
opportunity to open up new domains for the shippingbusiness.

Annual CO2 emissionsfor 2020

9.2 million tons

2020

Action Plan Road Map

2030

0103

Support the decarbonization of society

R&D

Zero-emission vessels
02

01-04

Seawing /2050

Operation / Expansion

LNG/LPG-fueled carriers“K” LINE
decarbonization

2040

Operation / Expansion

R&D

Operation / Expansion

Wind power propulsion
Improvement ofoperational efficiency
Support for renewable energy
generation businesses /Transportation of new fuels /CO2 transportation / etc.

IncreasingExpansion

3

Progress of Current Initiatives“K” Line decarbonization—Reduce CO 2 emissions
01

New fuels (fuel conversion)

Expand introduction of LNG fueled ships•

Expanding introduction of LNG in the 2020s andinvest in approximately 40 vessels by 2030
Delivered “K” LINE’s first LNG-fueledcar carrier, CENTURY HIGHWAY GREEN,in March 2021
Plan to deliver “K” LINE’s first LNGfueled capesize bulk carrier in 2024
Decided to invest in a further eight
LNG-fueled car carriers by 2025

Approximately 25% to 30% reduction in CO2emissions, compared with heavy-oil fueledvessels•

Currently considering the introduction of zero-emission fuels,
such as ammonia and hydrogen, and carbon-neutral fuels, suchas bio-LNG and synthetic fuel•Participating in a joint study framework for researching the useof ammonia as a maritime fuel that crosses industrial
boundaries, such as those between the shipping companies,trading companies, shippers, and manufacturers, with the aimof using ammonia-fueled vessels•

Currently considering the target of commercialization andintroduction of zero-emission vessels in the second half of the2020sCENTURY HIGHWAY GREEN

Zero CO2 emissions

Introduce LPG fueled ships•Introduce zero-emission vessels that use new fuelssuch as ammonia and hydrogen

Planning to deliver in 2023 a very largegas carrier (VLGC), mainly fueled by
LPG and capable of carrying LPG orammonia, with a view to transporting
ammonia in the future
Approximately 20% reduction in CO2emissions, compared with heavy-oil
fueled vessels

Photograph provided by
Kawasaki Heavy Industries, Ltd.

Photograph provided by
the Japan Ship TechnologyResearch Association4

Progress of Current Initiatives“K” Line decarbonization—Reduce CO 2 emissions
02••

Seawing automated kite system that utilizes
wind power propulsion

Developed in collaboration with French company AIRSEAS, aspin-off from AIRBUS
Currently considering expanding use of this new technology thatcan be installed on any type of vessel, including existing ones, toall vessels

03

Kawasaki Integrated Maritime Solutions(integrated ship performance analysis system)•Collects the vessel operation data, including fuel consumption,
output power, ship speed, in real-time and pursues theadvancement of operational management of the vessel byutilizing an optimum navigation system that calculates safe andfuel-efficient recommended routes•

Recently achieved visualization of performance degradation andimpact of external disruption of each individual vessel throughAI data analysis technology to further maintain and improve
operational efficiency

Installing on a capesize bulk carrier scheduled to begin in
fiscal 2022
Expecting a reduction in CO2 emissions of more than 20%

Pursuing a reduction in CO2 emissions by 45% to 50% through the synergistic
effect of installation on LNG-fueled vessels

Improvement of operational efficiencyResulting in approximately 3% to 5% reduction in CO2 emissions
through installation of Kawasaki Integrated Maritime Solutions

DATA COLLECTING ＆MONITORING

Integrated
ship performance
analysis system
PERFORMANCEANALYSIS

OPTIMUM
NAVIGATION

LNG-fueled capesize bulker

5Progress of Current Initiatives“K” Line decarbonization—Reduce CO 2 emissions
04

Other energy-efficient and decarbonization
technology and equipment

05

Hybrid propulsion system•* Binary cycle power generation:a method of generating electricity byheating and evaporating a working fluid with a low boiling point
through low-level heat sources, suchas warm water, low-pressure steam,or air, and using the steam to turn aturbine•

Raising funds through Japan’s first climate transition loan(purpose specified finance) for the LNG-fueled car carrier,
CENTURY HIGHWAY GREEN , in March 2021•

Raising approximately ¥110 billion through Japan’s firsttransition linked loan (purpose unspecified finance) in
September 2021. Funds to be used to finance a range ofenvironmental counter－measures aimed at decarbonization

Diesel generator

Considering a hybrid propulsion system that combines ashaft generator, binary cycle
power generation*, and lithium ion batteries

Shaft generator
Main engine

SG

12Binary cycle powergeneration

34

5

6

7

Raising funds through climate transition finance

8Lithium ionbattery

06

Launch of internal carbon pricing (ICP)

Power generation
CO2 Capture Plant on vessel••

World’s first CO2 Capture Plant onvessel installed on coal carrier
CORONA UTILITY in August 2021•

Full-scale internal launch of operation in April 2021. Calculatedwith reference to an economic index that takes into account afuture earnings contribution of ¥4000 per ton of CO2•

Promote low-carbon and decarbonization projects by using
them as an indicator for evaluation of investment projects

Currently carrying out project demonstration in collaboration withMitsubishi Shipbuilding and Nippon
Kaiji Kyokai, aiming for commercialization of the plant6

Progress of Current Initiatives

Support the decarbonization of society01••

Support offshore wind power business02

Established “K” Line Wind Service, LTD.
together with Kawasaki Kinkai Kisen
Kaisha, Ltd. and provided in offshore
support vessels and transport vessels
for offshore wind farms
Support target set by the Japanese
government for introducing offshore
wind power generation of 30 to 45
gigawatts by 2040 from an operationaland transportation perspective•Participate in “Co2-free Hydrogen Energy Supply-chain Technology Research Association (HySTRA)” with the aim of creating
an international supply chain for transportation of CO2-freehydrogen created from Australian brown coal to Japan•

Currently considering re-entering
the ammonia transportation business•Currently considering participationin the project to create a supply
network for hydrogen and ammonia at all sites

Offshore Support Vessel03

Participate in CO2 transportation business•Participate in R&D and demonstration project for CO2 marinetransportation together with the Engineering Advancement
Association of Japan, Nippon Gas Line Co., Ltd., and Ochanomizu
University
Joint development oftransportation vessel

Emission / collection

Extraction
Tank

Receiving
Liquefied CO2 carrier

Liquefication

Separation / collection

Shipping terminal

Re-vaporization

Tank

Participate in transportation of hydrogen and ammonia,
and create fuel supply network

Photograph provided by
Kawasaki Heavy Industries, Ltd.

04

Other initiatives•

Collaborate with Chubu Electric Power Co., Inc. on a tidal energy
project in Canada (aim to begin operation in 2023)•Looking into carbon credits, carbon offset, etc.
Note: Offsetting emissions may be carried out through an internationally accepted
method in the future.

HeatingTransportation

Receiving

Marine transportation

Receiving terminal

7

Environmental Governance

Environmental Management Promotion
Structure

DRIVE GREEN NETWORKIn October 2021, “K” LINE reorganized the previous organization andreformed the environmental governance structure.
The Corporate Sustainability Management Committee is enhancing
corporate value by reviewing and formulating a promotion system for "K”
LINE’s sustainability management, including environment-relatedmanagement.
The GHG Reduction Strategy Committee functions as a place to holdvarious strategic discussions on accelerating initiatives to develop LNGfueled vessels and the LNG fuel supply business, examining next-generation
fuels and new technologies, and formulating measures for compliance withinternational environmental regulations, including technical aspects.

“K” LINE established the DRIVE GREEN NETWORK as a Groupwide
environmental management promotion structure, which aims tocontinuously improve environmental conservation activities through thePDCA cycle while ensuring environmental compliance throughout the entire“K”Line Group.

DRIVE GREEN NETWORK
Ship managementcompanies

4

Board of Directors

companies

Supervising

Management Conference

President & CEO
Executive Officers’ Meeting
Entrusting

ReportingCorporate Sustainability
Management Committee
Supervising/Directing

ReportingTerminal
Operator andwarehousing
companies
and others

Marine Transportation andShipping Agency
companies

Entrusting

Reporting

GHG Reduction Strategy Committee
Reporting

Supervising/Directing

20

16

companies

companies
Logistics andland transportationcompanies2

companies
Environmental
Sub-Committee

Sustainability
Sub-Committee

CII and 2030
Environmental
Target ProjectTeamFleet
Decarbonization
Project Team

Safety andEnvironmentalTechnology ProjectTeam

8

Note: These action plans were formulated on the assumption of expected development of international laws and standards, technological innovation, and the establishment of social infrastructure,
and we will carry out appropriate revisions based on future changes to these prerequisites.